The five-week partial government shutdown that ended Friday cost the U.S. economy $3 billion it will likely never recover, according to a Monday report by the nonpartisan Congressional Budget Office.
According to the CBO’s report, the economy lost $11 billion during the shutdown, which began just before Christmas, but will gain back $8 billion now that the government has reopened.
“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 in a Monday statement.
The 35-day shutdown, which broke the record for the longest the federal government has ever been closed, was the result of stalled negotiations between Republicans and Democrats over President Trump’s demand for $5.7 billion for the construction of a wall on the southern border. About 800,000 federal workers were furloughed or forced to work without pay as it unfolded.
“Underlying those effects on the overall economy are much more significant effects on individual businesses and workers,” the CBO’s report reads. “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 fourth quarter of last year saw economic growth drop by 0.2 percentage points, and the first quarter of 2019 has seen it drop by .4 percentage points.
House Budget Committee chairman, John Yarmuth, a Democrat, criticized Trump after the release of the report.
“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 Monday.
Trump has threatened to let the government shut down again on February 15, when the stopgap-funding bill signed Friday expires, if Democrats continue to stand firm in their opposition to more border-wall funding.