The five-week partial government shutdown cost the U.S. economy about $3 billion in forgone economic activity that won’t be recovered, the Congressional Budget Office said in a new report Monday.
The agency projected that an overall $11 billion in losses due to the shutdown over President Donald Trump’s border wall will be offset by a projected $8 billion boost for the GDP through the remainder of the year.
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“Underlying those effects on the overall economy are much more significant effects on individual businesses and workers,” the agency says. “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 shutdown, which ended on Friday, reduced GDP in the fourth quarter of 2018 by $3 billion, in addition to $8 billion in the first quarter of 2019.
The shutdown also delayed about $18 billion in federal discretionary spending by sidelining salaries and suspending federal services.
The agency cautioned that the shutdown’s estimate effect on the economy is “subject to considerable uncertainty.”
For example, CBO said it wasn’t sure how federal employees and contractors adjusted their spending while not getting paid, or how agencies will adjust their spending and goods and services now that the shutdown is over.
CBO’s shutdown report was released alongside the agency’s annual report detailing the nation’s economic outlook for the next decade. That annual economic outlook report doesn’t include the effects of the shutdown.
The agency estimated that the U.S. federal budget deficit will hit about $900 billion this year and exceed $1 trillion every year beginning in 2022.
CBO’s projection of the federal deficit for 2019 is about $75 billion less than what it was last spring, namely due to a decrease in emergency spending.
Two years into Trump’s tenure, the national debt is expected to soar, to almost $29 trillion in 10 years. That debt held by the public would be the largest percentage since 1947 and more than twice the average of the past 50 years.