WASHINGTON — The U.S. government shutdown is costing the economy about $7 billion per month that won’t be recovered when it reopens, according to a new report by the nonpartisan Congressional Budget Office.
In a letter to House Budget Committee Chair Jodey Arrington, R-Texas, the CBO offered estimates for three scenarios regarding the length of the shutdown, which began Oct. 1 and is nearing a full month.
The CBO projected real gross domestic product declining by $7 billion in a four-week shutdown, $11 billion in a six-week shutdown and $14 billion in an eight-week shutdown.
“After the shutdown, real GDP will be temporarily higher than it would have been otherwise,” the CBO wrote in its analysis Wednesday. “Although most of the decline in real GDP will be recovered eventually, CBO estimates that between $7 billion and $14 billion (in 2025 dollars) will not be.”
The budget office said spending on goods and services will decline during the shutdown, as more than a million workers go without pay, but rise again after the government reopens. It said that there will be “negative” macroeconomic effects compared to a scenario in which the government didn’t shut down and that those effects “will intensify the longer the shutdown lasts.”
Using federal agency data, the CBO estimated that “about 600,000 employees will be considered excepted and continue to work each week, and 650,000 employees will be furloughed, on average.”
The CBO report said its estimate had taken into account that the military and some federal law enforcement personnel have continued to be paid through funds reallocated by the White House.
But the vast majority of federal employees are not drawing paychecks during the shutdown. Once the government reopens, under federal law, they will be paid back, whether they worked or not.
We’d like to hear from you about how you’re experiencing the government shutdown, whether you’re a federal employee who can’t work right now, a person who relies on federal benefits like SNAP, or someone who is feeling the effects of other shuttered services in your everyday life. Please contact us at tips@nbcuni.com or reach out to us here.
