CBO: Government Shutdown Shrinks Real GDP by $7 Billion
- The CBO's report offers a crucial, nonpartisan assessment of the economic consequences of the current government shutdown.
- the Congressional Budget Office (CBO) said Wednesday (Oct.29) that the government shutdown could reduce real gross domestic product by between $7 billion and $14 billion, depending on how...
- A four-week shutdown would cost $7 billion, a six-week shutdown would cost $11 billion and an eight-week shutdown would cost $14 billion, the CBO said in a report...
Government Shutdown to Impact GDP, CBO Reports
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the Congressional Budget Office (CBO) said Wednesday (Oct.29) that the government shutdown could reduce real gross domestic product by between $7 billion and $14 billion, depending on how long the shutdown lasts.
A four-week shutdown would cost $7 billion, a six-week shutdown would cost $11 billion and an eight-week shutdown would cost $14 billion, the CBO said in a report released Wednesday.
The government shutdown began on Oct.1, making Wednesday the end of the fourth week.
The CBO performs nonpartisan analysis for the U.S. Congress, according to its website.
“In CBO’s assessment, the shutdown will delay federal spending and have a negative effect on the economy that will mostly, but not entirely, reverse once the shutdown ends,” the CBO said in a summary of its findings.
The CBO added that real GDP will be lower in the fourth quarter than it would have been without a shutdown but will be temporarily higher after the shutdown than it would have been otherwise.
“Even though most of the decline in real GDP will be recovered eventually, CBO estimates that between $7 billion and $14 billion (in 2025 dollars) will not be,” CBO said in its summary.
“The effects of the shutdown on the economy are uncertain,” CBO said in the summary. “Those effects depend on decisions made by the administration throughout the shutdown. In addition, how federal employees and contractors respond to the delay in compensation is uncertain.”
Estimated GDP Reduction by Shutdown Duration
| Shutdown Duration | Estimated GDP Reduction (billions of 2025 dollars) |
|---|---|
| Four Weeks | $7 |
| six Weeks | $11 |
| Eight Weeks | $14 |