The economy could lose up to $14 billion due to the government shutdown, according to a nonpartisan congressional report released Wednesday.
The Congressional Budget Office’s assessment says the shutdown will have a “negative effect on the economy that will mostly, but not entirely, reverse once the shutdown ends.”
Wednesday marks Day 29 of the shutdown, which began Oct. 1, with Democrats and Republicans still at an impasse on how to fund the government.
The closure is expected to have a permanent impact on gross domestic product — which has been adjusted to remove the effects of inflation — and would worsen as the shutdown continues.
With a reopening, real GDP is expected to be temporarily higher than it would have been otherwise.
The output lost due to furloughed employees working fewer weeks during the shutdown can’t be recovered, according to the report. Output would return to its normal level once the government reopens and services resume.
About 750,000 federal workers have been temporarily furloughed amid the shutdown.
The analysis looks at three scenarios: a four-week shutdown ending Oct. 29, a six-week shutdown ending Nov. 12 and an eight-week shutdown ending Nov. 26.
“CBO estimates that, by the end of 2026, the reduction in hours worked by furloughed federal employees would result in a cumulative loss of real GDP of $7 billion in the four-week shutdown scenario, $11 billion in the six-week scenario, and $14 billion in the eight-week scenario,” the report said.
CBO noted that some variables, such as responses to the shutdown by the Trump administration and federal employees affected, mean that the “estimated effects and their timing are subject to considerable uncertainty.”
