The country is projected to suffer an economic loss of roughly $15 billion every week in a shutdown, according to the Council of Economic Advisers.
The ongoing shutdown of the federal government could negatively impact America’s GDP, Treasury Secretary Scott Bessent said in a CNBC interview published on Oct. 2.
On Oct. 1, the federal government shut down after Democrats and Republicans failed to agree on a deal to pass a short-term plan to keep the government funded. The House of Representatives has approved a funding proposal, but the Senate has yet to pass it.
Senate Democrats opposed the plan, demanding that it include the rollback of Medicaid cuts made in the One Big Beautiful Bill Act, signed into law by President Donald Trump in July.
They also want to extend enhanced subsidies under the Affordable Care Act, which were introduced amid the COVID-19 pandemic and scheduled to expire by year-end. Republicans have rejected the demands and have asked that the government reopen before negotiating on health care policies.
In his interview, Bessent criticized Democrats’ stance on the issue.
“This isn’t the way to have a discussion, shutting down the government and lowering the GDP,” he said.
“We have a 3.8 percent GDP, and the Democrats shut down the government. We could see a hit to the GDP, a hit to growth, and a hit to working Americans.”
According to recent data from the Bureau of Economic Analysis, the United States registered a 3.8 percent GDP growth in the second quarter, higher than the expected 3 percent. The growth rate improved significantly from the first quarter’s 0.6 percent contraction.
The White House credited the growth to Trump’s economic policies, such as tax cuts, tariffs, deregulation, and a focus on America’s energy revitalization.
Bessent’s statement that the government shutdown would negatively impact the United States’ GDP has been echoed by the Council of Economic Advisers, an agency within the Executive Office, charged with advising the president.
In an Oct. 1 report, the council cited estimates from Goldman Sachs and the Federal Reserve that quarterly GDP could drop by roughly 0.2 percentage points for every week of a federal government shutdown.
“If applied to current GDP levels, that implies an economic loss of approximately $15 billion per week,” said the report.
The White House said in an Oct. 3 post that the shutdown may result in job losses in all 50 states. If it prolongs for a month, there could be over 43,000 more unemployed Americans.
Moreover, “consumer spending will fall as a result of lost wages from furloughed workers and reduced federal contract spending,” it said.
