Government shutdown could lead to $14B in lost GDP, CBO reports

The ongoing federal shutdown could cost the U.S. economy between $7 billion and $14 billion, according to a new report from the nonpartisan Congressional Budget Office.

The report, prepared in response to a request from House Budget Chair Jodey Arrington (R-Texas), estimated the economic impact of the shutdown if it lasts four weeks — a mark hit Wednesday — six weeks, or two months.

Under all three scenarios, the CBO expects economic growth to be back on track after 2026, but some of the real gross domestic product loss resulting from furloughs of federal workers will not be recovered. That permanent loss could be anywhere from $7 billion, if the shutdown were to end now, and $14 billion, if it were to drag on for an additional month.

The Trump administration has placed about 750,000 federal workers on furlough, and many more are currently working without pay, although their ability to claim back pay after the government reopens — a standard precedent under previous government shutdowns — appears uncertain.

The CBO also anticipates that real GDP will be anywhere from 1 to 2 percentage points lower in the fourth quarter of 2025 than it would have been if the government remained open.

“The effects of the shutdown on the economy are uncertain. Those effects depend on decisions made by the Administration throughout the shutdown,” CBO Director Phillip Swagel wrote in the report.

The economic impacts of the shutdown will also be exacerbated when the federal government ceases disbursements of Supplemental Nutrition Assistance Program benefits beginning Nov. 1, per the CBO.

The Department of Agriculture, which administers the program in partnership with states, has decided not to tap emergency funds to keep food aid flowing amid the shutdown — a move being challenged by Democratic leaders of more than two dozen states.

While a resolution to reopen the government remains elusive, Senate Majority Leader John Thune told POLITICO on Wednesday that talks to end the shutdown have “picked up.”