Government Shutdown Enters Second Week, Impacting 2.3 Million Federal Workers

Strategic Insights -

The longest government shutdown in history is quickly approaching the second week, with some lawmakers predicting it could become the longest in U.S. history, surpassing the 21-day shutdown in 1995-96. The Trump administration is using the current shutdown to buttress priorities it favors while seeking to dismantle those it doesn't. Democrats are insisting that any funding bill include help for millions of Americans who will lose health insurance coverage or face dramatically higher monthly premiums.

Key Takeaways:

  • The government shutdown began on October 1 and has impacted nearly 2.3 million federal workers, with about 750,000 employees furloughed each day.
  • Furloughed workers will get paid on a retroactive basis, but may miss a full paycheck later this month after receiving a partial one earlier for work performed in late September.
  • The Pentagon has temporarily reprieved active-duty service members from missing a paycheck, but a second reprieve looks unlikely.
  • The government tab for paying furloughed workers is estimated at around $400 million a day, according to the Congressional Budget Office (CBO).
  • The Trump administration has announced plans to reduce the workforce by more than 10,000 workers, with the biggest cuts happening at the departments of Treasury, Health and Human Services, Education, and Housing and Urban Development.
  • A federal judge has blocked the firings, citing concerns that they may be politically motivated and carried out without adequate consideration.
  • Food banks in some communities have boosted efforts to help federal workers and contractors facing financial stress.
  • Past shutdowns have had slight impacts on the economy, but a prolonged shutdown could reduce economic growth by 0.1 to 0.2 percentage points per week.
  • The U.S. Travel Association estimates that the travel economy is expected to lose $1 billion a week due to the shutdown's impact on national parks and historic sites.
  • Small businesses are also hurting, with the Small Business Administration supporting loans totaling about $860 million a week that are now delayed during the shutdown.
  • The shutdown has also halted the issuance and renewal of flood insurance policies, delaying mortgage closings and real estate transactions.

Statistics:

  • 2.3 million federal workers impacted by the shutdown
  • 750,000 employees furloughed each day
  • $400 million a day cost to pay furloughed workers
  • 10,000-plus planned workforce reductions
  • 1% estimated reduction in economic growth per week
  • $1 billion weekly loss in the travel economy
  • $860 million weekly loss in small business loan support
  • 0.1 to 0.2 percentage points reduction in economic growth per week
  • 1.2 to 2.4 percentage points reduction in economic growth for a quarter-long shutdown

Sources:

  • "Government shutdown enters second week, impacting 2.3 million federal workers" by the Associated Press (no date provided)
  • Congressional Budget Office (no date provided)
  • The U.S. Travel Association (no date provided)
  • Oxford Economics (no date provided)
  • The Capital Area Food Bank (no date provided)
  • The U.S. Chamber of Commerce (no date provided)