If the nonpartisan Congressional Budget Office is right, the U.S. economy stands to lose somewhere between $7 billion and $14 billion because of the federal government shutdown.
In a report released Wednesday, the CBO – Congress’s nonpartisan bookkeeper – said federal workers missing paychecks and the interruption of food benefits for low-income Americans are expected to temporarily lower gross domestic product by 1 to 2 percentage points in the fourth quarter of 2025, the Washington Post reported.
Output is expected to bounce back once the government reopens and services resume, reversing most of the economic slowdown. But the hours lost by furloughed federal workers would permanently impact real GDP – an effect that would get worse the longer the shutdown, now beginning its second month, drags on.
“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,” CBO director Phillip Swagel wrote in a letter to House Budget Chairman Jodey Arrington (R-Texas), who requested the analysis, according to The Post.
If Congress agreed to reopen the government this week, the economy would lose $7 billion by the end of 2026 compared to if there had not been a shutdown, according to the CBO.
If the shutdown ends after six weeks – which would be around Nov. 12 – the economy would permanently lose $11 billion in GDP by the end of 2026. That loss would grow to $14 billion if the shutdown lasts until the end of November, The Post reported.
The federal government shut down on Oct. 1 when Congress failed to pass a temporary funding measure.
Around 750,000 federal workers have been temporarily furloughed as a result of the funding impasse. Others are working without pay. The administration has moved to ensure some workers – including active-duty military, law enforcement agents, and Immigrations and Customs Enforcement deportation officers – received their most recent paycheck.
Federal employees aren’t the only ones being affected. SNAP, the Supplemental Nutrition Assistance Program commonly known as food stamps, is set to run out of funding on Saturday. The Agriculture Department has said it cannot use $5.5 billion in contingency funds to keep the program running, which means SNAP benefits will temporarily halt in states that cannot make up the difference, according to The Post report.
