The five-week partial shutdown that ended Friday cost the U.S. economy $3 billion, according to a new report by the nonpartisan Congressional Budget Office (CBO).
The economy lost $11 billion during the course of the shutdown, which began Dec. 22, but some $8 billion of that will be recovered as the government reopens and workers receive back pay.
“Although most of the real GDP lost during the fourth quarter of 2018 and the first quarter of 2019 will eventually be recovered, CBO estimates that about $3 billion will not be,” CBO Director Keith Hall said Monday in a prepared statement.
All in all, that amounts to a 0.2 percentage point drop in economic growth in the fourth quarter of 2018, followed by a 0.4 percentage point decline in growth during the first quarter of 2019.
CBO primarily looked at the economic cost of leaving 800,000 federal workers unpaid, reduced government spending on goods and services and lower demand resulting from the shutdown. The report did not take incorporate possible effects on the business sector from the inability to access certain loans, permits and certifications during the downturn.
CBO noted that while the overall economic effects of the shutdown were somewhat muted, the effects on individual workers and businesses who lost business could be far deeper.
“Some of those private-sector entities will never recoup that lost income,” Hall said.
House Budget Committee Chairman Rep. John Yarmuth (D-Ky.) blasted President Trump for the shutdown following the report’s release, and warned about the possibility of more damage without a deal to avert another shutdown by February 15.
“The CBO confirms that the Trump shutdown had a debilitating effect on our entire economy, and if it were to resume in three weeks, millions of Americans would again share the pain of the 800,000 workers who spent the past month without a paycheck,” Yarmuth said.
“I am hopeful that we have finally reached a turning point with these mindless shutdowns, but this CBO estimate serves as a stark warning to President Trump on the consequences of using American workers as a bargaining chip,” he added.