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 researchers said 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.
© 2021 Thomson/Reuters. All rights reserved.