Treasury Secretary warns shutdown may cost economy $15 billion per day

Secretary of the Treasury Scott Besant He said Wednesday that the ongoing government shutdown could cost the U.S. economy billions of dollars a day.

Besant said in a partial news conference Government shutdown “It’s starting to shrink here” as the lockdown continues into its third week.

“We believe that this closure may begin to cost the US economy up to $15 billion per day,” Besant said. The shutdown began on October 1, as congress and the White House had not passed a funding bill when fiscal year 2026 began that day.

The Treasury Secretary called on moderate Democrats in the Senate to “be heroes” and “stay away from the cell of extremism” by supporting the continued resolution of Senate Republicans and voting to “reopen the government to the American people.”

Trump official says federal job cuts will exceed 10,000 during shutdown as judge halts layoffs

Democrats in the Senate They blocked the temporary funding measure nine times after another failed vote on Wednesday. Democrats are calling for extending health insurance subsidies under Obamacare, which is set to expire this year. The temporary subsidy, which is direct payments made to insurance companies in exchange for lower premiums, was approved in the American Rescue Plan in 2021, and was extended until the end of 2025 in the Inflation Reduction Act. The law allowed those with incomes up to 400% above the poverty level to qualify for subsidized premium rates.

Government shutdowns have occurred periodically since 1995, when Republicans took control of Congress for the first time in 40 years. Non-essential workers are being furloughed during the lockdown period Essential workers Stay on the job — even though both groups do not receive salaries under federal law until the gap in government funding ends.

Lockdowns typically have little impact on the economy, although it is currently unclear what the toll of the current lockdown will be.

Massive layoffs have “begun” as the government shutdown continues

The government shutdown began on October 1. (Bill Clark/CQ-Roll Call, Inc/Getty Images/Getty Images)

Federal Reserve Bank of Chicago President Austin Goolsby said in a discussion moderated by FOX Business’ Edward Lawrence earlier this month at the Midwest Agriculture Conference that while the central bank is not involved during shutdowns, the economic impact varies based on the duration and volume of federal funding.

“Historically, non-broad lockdowns that don’t last very long don’t do anything for the overall economy because, yes, they don’t get paid, but people’s spending doesn’t go down because they know they’ll get their money eventually,” Goolsby said.

“So it depends on how long this is going to take. It depends on how extensive it is. If there are reasons why this lockdown looks different than the last, we will have to review. But this is kind of the starting point,” he added.

Prediction markets see cloudy outlook as traders bet on extended lockdown

House Minority Leader Hakeem Jeffries, D-N.Y., and Senate Minority Leader Chuck Schumer, D-N.Y., are calling for an extension of the expiring Obamacare subsidies. (Nathan Posner/Anadolu/Getty Images/Getty Images)

An analysis by Goldman Sachs economists said most government shutdowns were short and that the longest shutdown in 2018 lasted 35 days — though it affected only about 15% of the federal government as Congress had funded about 85% of its operations at that point.

Goldman found that for each week of a government shutdown, federal furloughs would decrease on a quarterly basis Economic growth By about 0.15 percentage points of GDP in the fourth quarter, with a positive effect of equal magnitude on first-quarter growth assuming the lockdown ends by then.

The company’s analysis also found that a shutdown could temporarily raise the unemployment rate, but the impact should be minimal as furloughed workers are reported as unemployed upon temporary layoffs.

Get FOX Business on the go by clicking here

The Office of Management and Budget analyzed the closure process during fiscal year 2014 and noted some areas Economic turmoil caused by the shutdown.

These measures include stopping the issuance of permits, reviews, and licenses (as is the case for energy projects); Suspending IRS income verification for financial institutions that screen borrowers; stopping hundreds of small business loans; As well as tourism and travel disruptions from the closure of national parks.