A prolonged federal government shutdown could result in economic losses ranging from $7 billion to $14 billion, according to a new analysis by the Congressional Budget Office (CBO). The estimate reflects a potential reduction in real gross domestic product growth by 1 to 2 percentage points, depending on the duration of the closure. Although delayed federal spending is expected to resume once operations restart, the immediate economic disruption remains significant. n nThe CBO report, authored by Director Phillip Swagel and addressed to House Budget Committee Chair Jodey Arrington (R-Texas), notes that the actual economic consequences depend heavily on administrative decisions made during the shutdown. If federal agencies reopened on the day of the report’s release, the cumulative loss by the end of 2026 would amount to $7 billion. A six-week shutdown ending around November 12 would increase the loss to $11 billion, while a closure lasting through the end of November could lead to a $14 billion shortfall. n nAnother critical impact involves the Supplemental Nutrition Assistance Program (SNAP). While October benefits were fully funded, disbursements would halt starting November 1 if the shutdown persists. The CBO incorporated a 50 percent assumption that SNAP payments would eventually be issued retroactively once funding resumes, though uncertainty remains. n nThe analysis also projects a temporary rise in the national unemployment rate due to furloughed federal employees. However, this effect is expected to reverse once workers return to their positions. n nFollowing the report’s publication, Arrington criticized Democratic lawmakers, accusing them of prioritizing political tactics over fiscal responsibility. “Even the independent, nonpartisan Congressional Budget Office confirmed the economy will lose 1% in growth because of the Schumer shutdown,” Arrington stated, referencing Senate Minority Leader Chuck Schumer (D-N.Y.). He added that affected families would face higher joblessness, reduced earnings, and tighter household budgets. n nMeanwhile, Senate Democrats plan to introduce legislation to extend funding for the Special Supplemental Nutrition Program for Women, Infants and Children (WIC), which supports low-income mothers and children. However, Schumer and other party leaders emphasize the need for negotiations on the impending expiration of Affordable Care Act (ACA) tax credits as part of any broader funding agreement. n— news from The Hill
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Shutdown will cost up to $14B in economic losses: CBO analysis
The nearly monthlong government shutdown will cost the United States between $7 billion and $14 billion, according to a new report released Wednesday by the Congressional Budget Office (CBO). n nDepending on the length of the shutdown, the CBO estimates that the shutdown will reduce real gross domestic product growth between 1 to 2 percentage points. While the shutdown will also delay federal spending, any negative ramifications should reverse once the shutdown is over. n nThe report, written by CBO Director Phillip Swagel to House Budget Committee Chair Jodey Arrington (R-Texas), stated that the real effect the shutdown could have on the economy is uncertain. Any impacts “depend on decisions made by the Administration throughout the shutdown.” n nIf the government reopened Wednesday, the economy would have lost $7 billion by the end of 2026. Should the shutdown end around Nov. 12, after six weeks, the economic loss would reach $11 million. If the shutdown lasts until the end of November, $14 billion could be lost. n nThe report maps out another looming outcome of the shutdown. Supplemental Nutrition Assistance Program (SNAP) benefits will be fully paid for October but will not be issued as of Saturday. n n“Because of the uncertainty, CBO’s analysis incorporates a 50 percent probability that SNAP benefits will be paid after October 31 if the shutdown continues beyond that date,” the report stated. “CBO’s analysis also incorporates the expectation that when the lapse in funding is over, missed SNAP benefits will be paid.” n nThe CBO also noted that the country’s unemployment rate will rise as federal workers remain furloughed, but this should decrease once the government reopens and federal employees return to work. n nFollowing the report’s release, Arrington slammed Democrats for “playing politics.” n n“Even the independent, nonpartisan Congressional Budget Office confirmed the economy will lose 1% in growth because of the Schumer shutdown,” Arrington said in a statement, referring to Senate Minority Leader Chuck Schumer (D-N.Y.). “For hardworking families that means higher unemployment, lower wages, and less money in their pockets.” n nArrington said Democrats this Halloween are “all trick and no treat.” n nThe report’s release comes as Senate Democrats plan to introduce legislation to pay for and extend funding for the Special Supplemental Nutrition Program for Women, Infants and Children, which provides essential nutrition assistance for lower-income mothers. n nBut Schumer and other Democrats argue that they and President Trump need to negotiate over the upcoming expiration of Affordable Care Act (ACA) tax credits.