The U.S. economy permanently lost about $3 billion from the 35-day federal government shutdown, according to a new report from the nonpartisan Congressional Budget Office.
The study finds that roughly $3 billion was removed from the gross domestic product in the fourth quarter of last year and an additional $8 billion was removed this month. The CBO estimates that $8 billion of that total will return to the economy now that government workers will get back pay.
The shutdown reduced overall economic growth by 0.1 percent in the fourth quarter of 2018 and will likely reduce economic growth in the first quarter of 2019 by 0.2 percent, the CBO finds.
“Underlying those effects on the overall economy are much more significant effects on individual businesses and workers. Among those who experienced the largest and most direct negative effects are federal workers who faced delayed compensation and private-sector entities that lost business. Some of those private-sector entities will never recoup that lost income,” the CBO stated.
The CBO admits that it has “considerable uncertainty” in its findings, and that the true damage to the economy may be much higher because the organization didn’t include harder-to-quantify pain caused by the shutdown, such as businesses hurt because they couldn’t get certifications, permits and government loans.
The shutdown was caused by President Trump’s refusal to accept any government funding plan that didn’t include money to construct a wall along the U.S.-Mexico border. The President temporarily relented on Friday, agreeing to a plan that funds the government through Feb. 15. It’s unclear whether another shutdown will occur at that point.
