The U.S. Economy Took a Big Hit During the Government Shutdown

A new report from the White House shows the damage of two weeks of partisan bickering in Washington.

The World War II monument in Washington is closed due to the government shutdown.
National Journal
Matt Vasilogambros
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Matt Vasilogambros
Nov. 7, 2013, 10:46 a.m.

The White House on Thursday re­leased some num­bers on the eco­nom­ic im­pact of the Oc­to­ber gov­ern­ment shut­down, and they’re bleak.

While the mar­kets have made gains and the un­em­ploy­ment rate con­tin­ues to drop, Obama ad­min­is­tra­tion of­fi­cials warned that the eco­nom­ic im­pact of the gov­ern­ment shut­down that las­ted for the first two weeks of Oc­to­ber would be severe.

“The re­port makes clear that the costs and im­pacts of the shut­down were sig­ni­fic­ant and wide­spread, and demon­strates why this type of self-in­flic­ted wound should not oc­cur again,” Sylvia Math­ews Bur­well, the dir­ect­or of the Of­fice of Man­age­ment and Budget, said in a state­ment.

Here are some of those num­bers:

  • Fed­er­al em­ploy­ees were fur­loughed for 6.6 mil­lion com­bined days — the most of any pre­vi­ous shut­down.
  • At its height, 850,000 people were fur­loughed per day.
  • The fed­er­al gov­ern­ment paid $2 bil­lion to em­ploy­ees who were fur­loughed and not work­ing dur­ing that time.
  • The Coun­cil of Eco­nom­ic Ad­visers es­tim­ates that the shut­down and debt crisis res­ul­ted in the cre­ation of 120,000 few­er private-sec­tor jobs in the first two weeks of Oc­to­ber.
  • Al­most $4 bil­lion in tax re­funds were delayed.
  • The Bur­eau of Land Man­age­ment was un­able to pro­cess about 200 ap­plic­a­tions for oil-drilling per­mits.
  • Two mil­lion liters of U.S. beer, wine, and dis­tilled spir­its were not shipped dur­ing that time be­cause the Treas­ury De­part­ment’s Al­co­hol and To­bacco Tax and Trade Bur­eau could not is­sue ex­port cer­ti­fic­ates.
  • $500 mil­lion was lost in vis­it­or spend­ing in na­tion­al parks and monu­ments.
  • The Small Busi­ness Ad­min­is­tra­tion couldn’t pro­cess 700 ap­plic­a­tions for $140 mil­lion of small-busi­ness loans.
  • The Na­tion­al Park Ser­vice lost $7 mil­lion in rev­en­ue.
  • The Smith­so­ni­an In­sti­tu­tion lost $4 mil­lion in rev­en­ue.
  • The In­tern­al Rev­en­ue Ser­vice lost an es­tim­ated $2 bil­lion in col­lec­tions.

Bur­well said in a state­ment that the shut­down could have long-term ef­fects on the fed­er­al gov­ern­ment:

The shut­down fol­lowed a three-year pay freeze for fed­er­al em­ploy­ees, cuts in train­ing and sup­port, and, for hun­dreds of thou­sands of work­ers, ad­min­is­trat­ive fur­loughs earli­er this year be­cause of se­quest­ra­tion. These cuts will make it harder for the gov­ern­ment to at­tract and re­tain the tal­ent it needs to provide top-level ser­vice to the Amer­ic­an people.

Earli­er on Thursday, the Wash­ing­ton Met­ro­pol­it­an Area Trans­it Au­thor­ity re­leased some fig­ures on how the shut­down af­fected the Dis­trict’s trans­port­a­tion sys­tem.

  • A $5.5 mil­lion loss in pas­sen­ger fairs and park­ing rev­en­ue.
  • 1.7 mil­lion few­er pas­sen­ger trips dur­ing that time.
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