Shutdown over Trump’s border wall cost the US economy $11bn: CBO

The non-partisan Congressional Budget Office estimates roughly $3bn of the total loss will not be recovered.

The five-week partial US government shutdown, triggered by the battle over President Donald Trump‘s border wall, cost the US economy $11bn, according to the latest analysis by the non-partisan Congressional Budget Office (CBO). 

That figure captures lost output from furloughed federal workers, delayed government spending on goods and services and dampened private sector activity resulting from the shutdown.

The CBO expects eight billion dollars of the loss to be recovered as the government gets back to business as usual and federal employees return to their jobs.

But some three billion in foregone economic activity will not be recovered, the CBO said. 

That means the level of projected economic growth for 2019 is expected to be 0.02 percent smaller than it would have been if the shutdown had not happened. 


Some individual businesses and workers may also not fully rebound from the financial hit they suffered as a result of the shutdown.

“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,” said the CBO. “Some of those private-sector entities will never recoup that lost income.”

Some 800,000 federal employees were furloughed or required to work without pay during the shutdown. Trump, last week, signed a bill that guarantees back pay for federal workers, but contractors, and other indirectly affected, will likely not recuperate their lost wages.

The CBO cautioned that its estimates do not incorporate other indirect negative effects, which are more difficult to quantify “but were probably becoming more significant as it continued”. 

For example, interruptions to federal permitting and reduced access to federal government loans may have led some businesses to postpone investment and hiring decisions – disruptions which can take a bite out economic growth.

Investor and consumer confidence may have wobbled because federal statistical agencies were unable to compile and publish crucial data to guide decisions.

The credibility of the federal government as an employer and contracting party may also have been eroded, “making it more difficult for federal agencies to attract and maintain a talented workforce and more expensive to enter into contracts with the private firms”, the CBO said. 

Source: Al Jazeera