Americans Are About to Feel the Government Shutdown
The ongoing government shutdown is poised to increasingly impact the American economy and the livelihoods of citizens, extending beyond federal employees to private businesses and everyday life. The U.S. Travel Association warned in a letter to congressional leaders last month that the funding lapse could cost the economy $1 billion per week.
The shutdown has already resulted in a significant disruption to the federal workforce. The Congressional Budget Office (CBO) estimates 750,000 federal workers have been furloughed. While a 2019 law guarantees these employees will receive back pay upon the government’s reopening, the cost of paying furloughed workers amounts to approximately $400 million daily. The Office of Management and Budget (OMB) recently considered, and congressional leaders have largely rejected, the idea of withholding this back pay, as reported by Axios on October 7th. Senator Joni Ernst (R-Iowa) highlighted the financial implications in an October 3rd letter to OMB Director Russell Vought, calling the payment of furloughed workers “no better symbol of Washington’s wasteful spending.”
The impact is beginning to ripple through the private sector. During the 2013 shutdown, Lockheed Martin announced furloughs for 3,000 employees within a week, anticipating further increases with a prolonged closure. While the company has been less forthcoming this time, spokesperson Cailin Schmeer stated in an email that they are “working with our U.S. government customers to assess the impact on our employees, programs, suppliers, and business, while supporting essential, mission-critical programs and mitigating the impact to our operations,” leaving the possibility of furloughs open.
The White House Council of Economic Advisers estimates that over 40,000 private-sector employees could lose thier jobs if the shutdown extends for a month. CBO Director Phillip L.Swagel cautioned in a letter to Senator Ernst last week that while the U.S. economy is expected to recover once the government reopens, some private businesses may “never recover all of the income they lost.”
The effects are already visible in communities reliant on federal activity. Gum Tong, owner of Pete’s Diner on Capitol Hill in Washington, D.C., reported an 80% drop in business sence the shutdown began. She is striving to avoid layoffs for her long-term employees, but emphasized the ongoing financial strain: “Our bills don’t stop when the government stops working,” she said.”I hope this shutdown doesn’t last long. Hopefully they can let everybody go back to work, and get on with their own life soon.”
