The ongoing government shutdown, which has lasted nearly a month, is projected to cost the United States between $7 billion and $14 billion, as indicated by a recent report from the Congressional Budget Office (CBO) published on Wednesday.
CBO estimates that the shutdown could knock off 1 to 2 percentage points from real gross domestic product (GDP) growth. While federal spending will slow down during this period, they expect the negative effects to reverse once operations resume.
Philip Swagel, the Chief Financial Officer, conveyed in a report to House Budget Chair Jody Arrington (R-Texas) that the overall economic impact remains uncertain. Any consequences “will depend on decisions taken by the government during the closure period,” he noted.
If the government reopens by Wednesday, losses to the economy could total $7 billion by the end of 2026. However, if the shutdown drags on for six weeks, around November 12, losses might reach $11 billion. Should the closure persist until the end of November, the total could climb to $14 billion.
The report also highlights an immediate effect of the shutdown: the Supplemental Nutrition Assistance Program (SNAP) benefits, which were supposed to be paid out in full for October, have not yet been distributed as of Saturday.
“Given the ongoing uncertainty, CBO’s analysis includes a 50% likelihood that SNAP benefits will be disbursed after October 31 if the shutdown continues,” the report explains. It also anticipates that any missed SNAP payments will be covered once the funding becomes available.
Additionally, the CBO pointed out that continued furloughs of federal workers are likely to raise the national unemployment rate, although this rate should decrease once the government reopens and employees return to their roles.
Following the report’s release, Arrington accused Democrats of “playing politics.” He pointed out that even the impartial CBO confirmed that Senate Minority Leader Chuck Schumer’s actions would lead to a 1% drop in economic growth. “For hardworking families, that translates to higher unemployment, lower wages, and less money in their pockets,” he argued.
Arrington added that this Halloween, Democrats are “all tricks and no treats.”
This report arrives as Senate Democrats are preparing to propose legislation aimed at funding and extending the Special Supplemental Nutrition Program for Women, Infants, and Children, which is crucial for providing nutritional support to low-income mothers.
On the other hand, Schumer and fellow Democrats have expressed the need to negotiate with President Trump regarding the expiration of the Affordable Care Act (ACA) tax credits.
