Unpaid Federal Employees Are Not Paid to Think
My guess is that the federal government is not going to reopen for quite some time. But that might not be a bad thing.
It’s important to understand what is — and what is not — affected by the shutdown. Trump is trying to target “Democratic agencies” and programs for termination as a result of the shutdown. As with most things about Trump, it’s confusing and counterproductive. One needs to assume that the “Democratic agencies” would be doing very little in the next four years, and those things they did would generally be considered chasing their tails to undo the work that Democratic administrations did with their Democratic agencies. On a human level, I feel bad for the employees who will likely be fired (although the firings have been blocked for now). Whether Trump can fire government workers is still being litigated in at least three cases. To date, the Supreme Court has refused to block the terminations, which means that these employees are out of work unless the government is forced to rehire them — at which point there might be a budget deal that eliminates their positions anyhow. So, IMHO, the shutdown really has no bearing on whether or not these workers at “Democratic agencies” will be terminated. They basically already have been.
Now let’s look at what is presumably a “Republican agency” — and the one Trump’s nationalist agenda seems most reliant on: the Department of Homeland Security. DHS has 271,927 employees. Only 22,862 are furloughed. The rest are working without pay under one of several “exceptions” (the broadest are positions that are “necessary to protect life and property”). That certainly sucks for those employees who need to work without pay, but the devil is in the details here — and it very much informs who wins and who loses in a shutdown.
Even “excepted employees,” meaning those who need to work during the shutdown, are directed not to engage in certain “non-excepted” functions (“No obligations should be incurred to carry out non-exempt/non-excepted activities during a lapse in appropriations”). The Department of Homeland Security says that the following functions are “non-excepted:”
“Planning (such as strategic or business activities) • Research and development activities • Most policy functions, administrative as well as programmatic, unless those functions are justified by an exception • Auditing • Most regulatory, legislative, public affairs, and intergovernmental affairs unless those functions are justified by an exception.”
My take is that while Immigration and Customs Enforcement agents (and all those other weird branches of DHS that seem to keep popping up) are still allowed to chase anyone with brown skin around D.C., Chicago, and Portland, Oregon (supported by the National Guard, maybe), they really can’t legally plan for any future deployments, research how to most effectively engage in mass deportations, or liaise with local authorities in places that may actually want them to chase out their immigrant workers (Texas and Tennessee come to mind). I’m interested to see if any other American cities are targeted for ICE enforcement in the next few weeks. My guess is that the planning needed to make that happen is on hold. That is not a bad thing for the country, but it’s bad for Trump.
The situation is similar over at the Department of Justice, where 102,000 of the agency’s 115,000 employees are exempt from furlough, meaning they are working but not being paid. But even those exempt employees are directed to “curtail” civil litigation. Criminal litigation will “continue without interruption,” although the prosecutors going after Trump’s political enemies are not being paid (for the time being), which is sort of nice. But by curtailing civil litigation, the Trump DOJ can’t make good on many of its promises to aggressively prosecute alleged violations of religious freedom, abortion providers, or whatever perverse government prerogative the far right (fever) dreams up. Those efforts are stalled out for now. Again, not a bad thing.
The result is that the planning — and most of the execution — needed to remake the nation in Trump’s image is on hold. Eventually, someone at the White House is going to notice, which is likely how this shutdown ends.
I’ll Pay More for the Bus if I Can Pay Less for Housing
I actually really don’t care who wins the New York City mayor’s race. Smart money is on Zohran Mamdani, and I assume he will win. I was last seriously involved in local politics in 2013, when Mamdani was apparently still in college, so I don’t know him or his people — although people who do have told me they are smart and capable. Hopefully, they are smarter and more capable than I was at 33.
What I am interested in are the ballot questions, specifically the ones that would modify the approval process for new housing. They should pass, and if you’re reading this and are a New York City voter, you should vote for them. You can read a really simple summary here.
Why do they deserve your support? I’ve written about housing in the past. IMHO these revisions are rather modest. The proposals would simplify the process of land use review (“ULURP”) and create an appeal process when projects are blocked by the local City Council member. The revisions get to the heart of why it’s so hard to build in New York City: local voters tend to have housing and really don’t care much if housing is built. So they pressure their local representatives to oppose new housing, which actually raises the price for everyone else and makes New York City unaffordable. Having ways to get deserving projects built without the morass of New York City Council politics is good for everyone, and these charter revisions deserve your support.
In opposition, you don’t hear much about “preserving neighborhood character” anymore because everyone knows what that is... racist. Rather, the opposition to these common-sense measures seems to be twofold. As a lawyer, it’s super important to understand the other side’s argument as well as your own, so you can eviscerate it.
The first argument the opposition makes is that City Council members know best what their communities want and need. Wrong. City Council members are uniquely unqualified to determine the city’s housing policy because they don’t see it holistically and are actually incentivized not to build new housing that disrupts their existing constituents. See above.
Educated opponents make a more wonky, but important, argument that we should all understand. The ballot initiatives speed up projects that are “income restricted,” meaning that the housing is designed for people with incomes below certain thresholds. Opponents challenge the criteria by which something is considered affordable (“Affordable for who?”) because they claim the income limits are too high. Since we back into rents based on the income limits, affordable projects with income limits of $120,000 per year for a two-bedroom allow for rents of one-third, or $40K per year = $3,333 per month. That is expensive and might exceed the rents on the smaller, crumbling buildings down the block — or perhaps pre-existing on the lot where the developer wants to build their new buildings. In their reading, that means that we’re replacing old very affordable housing with newer, less affordable housing. So The opponents claim to want “deeper affordability.” The problem is that they know projects need to pencil, meaning the building’s cash flow needs to support the investment. So by saying that they “would” support this if there was “deeper affordability,” they are basically saying they would support a housing program that won’t produce any housing. It’s a slippery argument. NIMBYs are slippery.
Mamdani has not really taken a position on the ballot intiatives. His housing policy is sort of in left field and does not really address the actual problem: freezing rents for one-third of the city will just increase costs for the other two-thirds. And the existing apartments will crumble.
In terms of Mamdani’s signature policy of free buses — I take the bus most days. Never have I thought that the biggest problem with the bus was the $2.90 fare. How about slow buses, crowded buses, and buses that never seem to arrive? Making the buses free won’t help any of that. In fact, it’s just going to make it worse. A free bus is just paid for in other ways: your time and sanity.
Both his housing policy and free buses are strong symbolism (affordability!) over strong policy. New York deserves better. Maybe Mamdani will grow into the job.
The Justice System Won’t Let You Repay Old Debts With an Unpaid Lawyer
The unpaid federal prosecutors in the Eastern District of Virginia are now tasked with the job of convincing a jury that New York State Attorney General Letitia James committed bank fraud and lied to a bank when she obtained a $109,000 mortgage on a property in Virginia.
Her ill-gotten gains: $18,933. Perhaps this will chill others from falsely stating that single-home investment properties are actually primary residences, letting lenders improve their bottom lines by... hundreds of thousands of dollars. Or perhaps this is just a really ham-fisted attempt at political retribution. I’d guess the latter.
As I wrote about before, the justice system is inherently political, and anyone who thinks that Trump (or Biden) doesn’t use the justice system to go after their enemies is naïve. But that does not mean you can do a half-assed job of it. Just compare the thoroughness of the civil complaint that James brought against Trump:
https://ag.ny.gov/sites/default/files/tto_complaint.pdf
with the complaint that Trump’s chosen U.S. Attorney has brought against James:
https://www.justice.gov/usao-edva/media/1416106/dl?inline
Or the criminal complaint brought against Trump by Alvin Bragg:
https://www.manhattanda.org/wp-content/uploads/2023/04/Donald-J.-Trump-Indictment.pdf
Trump was eventually found guilty but not sentenced to any time — since he was, well, President at the time of sentencing.
It’s one thing to use the justice system for political ends. It’s another to do it well. And as I wrote about last week, if all you’re doing is bringing crap cases against your political enemies, the only real victim is public faith in the criminal justice system. That might be Trump’s plan, but it’s pretty self-defeating.
I certainly hope that when the Democrats are back in power, their indictments of the Trump people will be comprehensive. I suspect they will be. What Democrats lack in communication skills and the ability to win elections, they more than make up for with legal acumen. Unfortunately, to show that acumen off, you need to win elections. And Democrats can’t seem to do that.
Keep thinking, keep building,
Jesse
Hi, and welcome to my newsletter! I’m Jesse Strauss, Your Fractional General Counsel. I’m a lawyer with a private practice based in New York City, helping clients in the United States and globally with their U.S. legal needs. My expertise spans various areas, including raising funding rounds, employment issues, negotiating master service agreements, intellectual property, compliance, legal process management, and dispute resolution. My focus is on founding and nurturing great companies from seed to exit. Discover more at Your Fractional GC and book a complimentary 30-minute consultation. You can also follow me on Threads @lawyerjesse1977, on BlueSky @lawyerjesse.bsky.social, subscribe to my Substack here (follow me on notes), and follow me on LinkedIn here.
Originally published at Fractionally Yours, Jesse's Substack.