Washington, Oct 15 (Reuters) – Treasury Secretary Scott Bessent stated on Wednesday that the ongoing federal government shutdown, now in its second week, is reducing U.S. economic output by approximately $15 billion per day. He emphasized the growing economic strain caused by the closure and called on Democratic lawmakers to collaborate with Republicans to bring it to an end, urging them to “be heroes” in resolving the impasse. n nAt a press briefing during the International Monetary Fund and World Bank meetings in Washington, Bessent explained that the shutdown is beginning to harm the foundational strength of the economy. n n”We estimate the daily cost to the economy could reach as high as $15 billion,” he said, highlighting how delays in federal operations are disrupting business confidence and investment momentum. n nBessent pointed to strong underlying economic conditions, including sustained interest in artificial intelligence and other high-growth sectors, which he believes remain robust. However, he warned that the shutdown is increasingly acting as a drag on this momentum. n nHe credited former President Donald Trump’s policy agenda with catalyzing a wave of economic expansion, noting that pent-up demand has been released due to deregulation and fiscal incentives. n n”The only factor holding back further acceleration is this current government closure,” Bessent added. n nHe expressed confidence that tax provisions under Republican legislation, along with tariff strategies, would continue to attract capital and support long-term growth. Drawing historical parallels, he likened the present economic potential to transformative periods such as the railroad expansion of the late 19th century and the tech boom of the 1990s. n nOn fiscal health, Bessent noted that the U.S. budget deficit for fiscal year 2025, which concluded on September 30, was lower than the previous year’s $1.833 trillion. While he did not disclose the exact figure, he indicated that the deficit-to-GDP ratio may soon fall into the 3% range, down from current levels beginning with a five. n n”Yes, achieving a ratio starting with three is still within reach,” he said, attributing this possibility to stronger economic growth, reduced government spending, and tighter fiscal discipline. n nThe Treasury Department has yet to release official figures for the annual deficit. n
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Shutdown is costing US economy $15 billion a day, Bessent says
Washington, Oct 15 (Reuters) – The two-week-old federal government shutdown is costing the U.S. economy about $15 billion a day in lost output, Treasury Secretary Scott Bessent said on Wednesday, putting an estimate on its economic toll and urging Democrats to “be heroes” and side with Republicans to end it. n nBessent told a news conference that the shutdown was starting to “cut into muscle” of the U.S. economy. n nSign up here. n n”We believe that the shutdown may start costing the U.S. economy up to $15 billion a day,” he said. n nThe wave of investment into the U.S. economy, including into artificial intelligence, is sustainable and is only getting started, but the federal government shutdown is increasingly an impediment, Bessent said. n n”There is pent-up demand, but then President (Donald) Trump has unleashed this boom with his policies,” Bessent said at a CNBC event held on the sidelines of the International Monetary Fund and World Bank annual meetings in Washington. n n”The only thing slowing us down here is this government shutdown,” Bessent said. n nHe said that incentives in the Republican tax law and Trump ‘s tariffs would keep the investment boom going and fuel continued growth. n n”I think we can be in a period like the late 1800s when railroads came in, like the 1990s when we got the internet and office tech boom,” Bessent said. n nUS DEFICIT HAS SHRUNK, BESSENT SAYS n nBessent also said that the U.S. deficit for the 2025 fiscal year ended September 30 was smaller than the $1.833 trillion deficit posted in the prior fiscal year. He did not provide a figure, but said that the deficit-to-GDP ratio could come down to the 3% range in coming years. n nThe Treasury Department has not yet reported the annual deficit figure. n n”The deficit-to-GDP, which is the important number, now has a five in front of it,” Bessent said at the CNBC event. n nAsked if he wanted to see a three at the start of the deficit-to-GDP ratio, Bessent said, “Yes, it ‘s still possible.” He added that the ratio would come down if the U.S. could “grow more, spend less, and constrain spending.” n nReporting by David Lawder and Andrea Shalal; Writing by Dan Burns and David Lawder; Editing by Paul Simao and Andrea Ricci