By David Morgan
WASHINGTON (Reuters) -The federal government shutdown could cost the U.S. economy between $7 billion and $14 billion, shaving up to 2% from gross domestic product in the fourth quarter due to the lapse in government spending, the nonpartisan Congressional Budget Office said on Wednesday.
The partial shutdown was in its 29th day on Wednesday with no end in sight, as Senate Republicans called on Democrats to support a stopgap measure to fund federal agencies through November 21 and Democrats demanded negotiations to extend expiring federal tax credits to help Americans purchase private health insurance coverage through the Affordable Care Act.
CBO estimated that the economy would suffer as a result of delayed federal spending for employee compensation, goods and services, and food stamp benefits for low-income Americans.
“Although most of the decline in real GDP will be recovered eventually, CBO estimates that between $7 billion and $14 billion will not be,” agency director Phillip Swagel said in an October 29 letter to House of Representatives Budget Committee Chairman Jodey Arrington, a Texas Republican who requested the analysis.
“The effects of the shutdown on the economy are uncertain. Those effects depend on decisions made by the administration throughout the shutdown,” Swagel wrote.
About 750,000 federal workers have been furloughed since government funding ended on October 1, the start of the 2026 federal fiscal year. The Trump administration has taken steps to provide pay to U.S. troops, federal law enforcement agents and immigration officers. Other federal employees have continued to work without pay.
CBO said the economy would suffer a permanent loss of $7 billion if the shutdown ended this week. A six-week shutdown continuing to November 12 would cost $11 billion and an eight-week shutdown lasting until November 26 would cost $14 billion.
(Reporting by David Morgan; editing by Scott Malone and Bill Berkrot)
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