The nearly monthlong government shutdown is projected to cost the U.S. between $7 billion and $14 billion, according to a new report from the Congressional Budget Office (CBO).
The CBO estimates the shutdown will reduce real GDP growth by 1 to 2 percentage points, depending on its duration. While federal spending delays will occur, the agency expects most negative effects to reverse once the shutdown ends.
The CBO report, authored by Director Phillip Swagel and sent to House Budget Committee Chair Jodey Arrington (R-Texas), noted that the shutdown’s actual economic impact remains uncertain and will “depend on decisions made by the Administration throughout the shutdown.”
If the government had reopened Wednesday, the economy would lose an estimated $7 billion by the end of 2026. A six-week shutdown ending around Nov. 12 would raise the loss to about $11 billion, and if it lasts through November, total losses could reach $14 billion. The report also warned that while Supplemental Nutrition Assistance Program (SNAP) benefits are fully funded for October, they will stop being issued starting Saturday.
“Because of the uncertainty, CBO’s analysis incorporates a 50 percent probability that SNAP benefits will be paid after October 31 if the shutdown continues beyond that date,” the report stated. “CBO’s analysis also incorporates the expectation that when the lapse in funding is over, missed SNAP benefits will be paid.”
The CBO also warned that the unemployment rate will temporarily rise as federal workers remain furloughed, but should decline once the government reopens and employees return to work. After the report’s release, Arrington criticized Democrats for “playing politics,” saying Democrats this Halloween are “all trick and no treat.”
“Even the independent, nonpartisan Congressional Budget Office confirmed the economy will lose 1% in growth because of the Schumer shutdown,” Arrington said in a statement, referring to Senate Minority Leader Chuck Schumer (D-N.Y.). “For hardworking families that means higher unemployment, lower wages, and less money in their pockets.”
