As Washington’s stalemate over a government shutdown reaches its fourth week, the economic impact is starting to add up. Economists estimate that the shutdown trims about 0.1 to 0.2 percentage points off economic output each week it persists. And those numbers don’t even capture the indirect impacts, such as the lost tourism revenue from national parks or the delayed drug reviews and approvals that support business activity.
The White House has illegally threatened to withhold back pay for furloughed federal workers, violating a law passed in 2019. Elaine Kamarck, a senior fellow at the Brookings Institution, says that could lead many of these employees to default on their mortgages or miss payments on their credit cards. She says the President’s threats also undermine morale. “For these people who are invested in the mission of the agency they work for and have devoted their lives to those missions, to be told that their work doesn’t matter is a gut punch,” she said.
In previous shutdowns, Congress has quickly reopened the government after the impasse ends. But this time, it’s hard to see how the stalemate will be resolved. If the White House refuses to agree to a deal that includes funding for ObamaCare subsidies, it may be willing to let the stalemate extend far into 2026, which would risk jeopardizing health coverage for 24 million Americans and potentially raising their premiums by 100% or more.
This article has been updated to clarify that a funding gap must be closed before the CDC can resume normal operations, including flu and COVID-19 surveillance and monitoring and the promotion of immunizations and disease treatment and prevention recommendations.