Partial U.S. government shutdown cost economy $3 billion: budget office

By David Morgan and Richard Cowan WASHINGTON (Reuters) - The U.S. economy took a hit from the 35-day partial federal government shutdown over President Donald Trump's demand for border wall funding, but much of the lost ground will be made up now that 800,000 federal employees are back on the job, congressional researches said on Monday

Reuters January 29, 2019 00:08:25 IST
Partial U.S. government shutdown cost economy $3 billion: budget office

Partial US government shutdown cost economy 3 billion budget office

By David Morgan and Richard Cowan

WASHINGTON (Reuters) - The U.S. economy took a hit from the 35-day partial federal government shutdown over President Donald Trump's demand for border wall funding, but much of the lost ground will be made up now that 800,000 federal employees are back on the job, congressional researches said on Monday.

Overall, the U.S. economy lost about $11 billion during the five-week period, the nonpartisan Congressional Budget Office said. But CBO expects $8 billion to be recovered as the government reopens and federal workers receive back pay.

The CBO said the cost of the shutdown will make the U.S. economy 0.02 percent smaller than expected in 2019. But researchers said more significant effects will be felt by individual businesses and workers, particularly those who went without pay.

The longest shutdown in U.S. history ended on Friday when Trump and Congress agreed to temporary government funding - without money for his wall - as the effects of the shutdown intensified across the country.

Trump had demanded that legislation to fund the government contain $5.7 billion for his long-promised wall along the U.S.-Mexico border, which he says is necessary to stop illegal immigration, human trafficking and drug smuggling.

A committee of lawmakers from both parties hold their first open meeting on Wednesday as they try to negotiate a compromise on border security before the Feb. 15 deadline.

The CBO estimated the shutdown reduced gross domestic product in the last quarter of 2018 by $3 billion.

It said that in the first quarter of 2019, the level of real GDP is estimated to be $8 billion lower than it would have been, citing "an effect reflecting both the five-week partial shutdown and the resumption in economic activity once funding resumed."

Trump said he would be willing to shut down the government again if lawmakers don't reach an acceptable deal, but on Sunday expressed skepticism that such an agreement could be reached.

He also left open the possibility of declaring a national emergency to get money for the wall, an extraordinary move that Democrats and some Republicans have vowed to fight and that would likely face a court challenge.

Federal workers are expected to get paid this week for the five weeks of missed paychecks. Federal contractors and businesses that relied on federal workers' business, however, face huge losses, although some lawmakers are pushing legislation to pay contractors back as well.

(Reporting by David Morgan and Richard Cowan; Editing by Doina Chiacu and Grant McCool)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.