The U.S. could also lose billions in economic activity, depending on how long the shutdown lasts.
After the ongoing government shutdown concludes, taxpayers will be on the hook for $400 million in backpay for every day that federal government employees were furloughed, the non-partisan Congressional Budget Office found.
An estimated 750,000 non-essential federal workers have been furloughed due to the shutdown, which began Wednesday at midnight after Senate Democrats blocked a Republican-backed continuing resolution that would have kept the government open through November 21.
The CBO shared their analysis with Senator Joni Ernst (R., Iowa) after she asked the agency to provide information on how much the federal government will have to spend on backpay for non-essential, furloughed employees.
“This political stunt is forcing the American people to pay $400 million every day for 750,000 non-essential bureaucrats not to work. From start to finish, the Schumer Shutdown puts the American people last,” Ernst said in a statement.
A prolonged government shutdown would also likely cost the U.S. billions in lost economic activity, the CBO predicted in its letter to Ernst.
The CBO estimated in 2019 that the five-week partial shutdown ending in January cut $3 billion from U.S. GDP — economic output that was never recovered. If the current shutdown were to last just as long as the last one, furloughed employees would collectively receive roughly $14 billion in backpay for days they did not work.
If the shutdown is anything like 2019, it will also hamper private sector demand for goods and services. Spending among federal workers will likely go down while they’re going without a paycheck and will only recover once the shutdown concludes, costing businesses revenue that they’ll never make up.
“The effects of a government shutdown on business activity are uncertain, and their magnitude would depend on the duration of a shutdown and on decisions made by the Administration. CBO expects that if a government shutdown persisted for several weeks, some private-sector entities would never recover all of the income they lost as a result of the suspension of federal activity,” the CBO said.
Democrats have said they will support a continuing resolution to fund the government only if Republicans include legislative language to permanently extend temporary Obamacare subsidies.
Republicans have responded by accusing Democrats of trying to extend Obamacare eligibility to illegal immigrants, since the Democrats’ continuing resolution would restore Obamacare eligibility for noncitizens deemed by states to be “lawfully present” in the U.S., including, in some cases, recipients of the Deferred Action for Childhood Arrivals, refugees, and asylum seekers.
“Democrats are holding the entire government hostage to fight for illegal immigrants to get taxpayer-funded healthcare,” Ernst said.
In a new memo, the White House argues Democratic demands to extend certain Obamacare subsidies will result in $200 billion in taxpayer dollars being spent on health care for illegal immigrants.
If the government shutdown persists, the Trump administration could reduce head counts at various federal agencies, firing some employees rather than simply furloughing them.
“Unfortunately, because the Democrats shut down the government, the president has directed his cabinet, and the Office of Management and Budget is working with agencies across the board, to identify where cuts can be made and we believe that layoffs are imminent,” White House press secretary Karoline Leavitt told reporters Wednesday.
Like other federal employees, active-duty military personnel will likely see their paychecks delayed because of the shutdown. But military employees are required to work during the shutdown even without pay. Unless they refuse a salary, members of Congress will continue receiving their paychecks throughout the shutdown, as the Constitution requires.
“The Democrats shut down the government but our troops will still report for duty & risk their lives to protect America. They will just have to do so without pay. Our troops always do their duty. The Democrats…not so much,” Pentagon spokesman Sean Parnell said on social media.
The Trump administration is already moving to withhold $18 billion of federal funding for infrastructure projects in New York City; directly targeting Schumer and House Minority Leader Hakeem Jeffrees (D., N.Y.). The federal government is also holding up $8 billion of “Green New Scam” funding for climate projects in states nationwide, Office of Management and Budget director Russ Vought announced.
President Trump has empowered Vought to oversee federal government layoffs and other permanent changes during the shutdown.