Government Shutdown Costing U.S. Economy $15 Billion Daily, Treasury Secretary Warns

Shutdown’s Economic Impact Reaches $15 Billion Daily

The two-week-old federal government shutdown is costing the U.S. economy approximately $15 billion daily in lost output, Treasury Secretary Scott Bessent stated Wednesday. According to reports from Washington, Bessent put this specific estimate on the economic toll while urging Democratic lawmakers to “be heroes” and side with Republicans to end the impasse.

Sources indicate that Bessent told a news conference the shutdown was starting to “cut into muscle” of the U.S. economy. “We believe that the shutdown may start costing the U.S. economy up to $15 billion a day,” he reportedly stated, marking one of the first specific daily cost estimates from a senior administration official.

Investment Boom Faces Government Hurdles

Analysts suggest the wave of investment into the U.S. economy, including into artificial intelligence, remains sustainable and is only beginning, but the federal government shutdown is increasingly becoming an impediment. Bessent acknowledged at a CNBC event held alongside the International Monetary Fund and World Bank annual meetings in Washington that “there is pent-up demand, but then President Trump has unleashed this boom with his policies.”

“The only thing slowing us down here is this government shutdown,” Bessent emphasized, according to the report. He suggested that incentives in the Republican tax law and the administration’s tariff policies would maintain the investment boom and fuel continued growth.

Historical Economic Parallels Cited

The Treasury secretary reportedly drew historical parallels, suggesting the current economic period could resemble transformative eras in American history. “I think we can be in a period like the late 1800s when railroads came in, like the 1990s when we got the internet and office tech boom,” Bessent stated, according to conference attendees.

This optimistic outlook comes despite the ongoing shutdown, which has now entered its third week with no immediate resolution in sight between the administration and congressional Democrats.

Deficit Shows Improvement Amid Tariff Revenue

Bessent also addressed fiscal matters, indicating that the U.S. deficit for the 2025 fiscal year ended September 30 was smaller than the $1.833 trillion deficit recorded in the previous fiscal year. While he didn’t provide specific figures, analysts suggest the deficit-to-GDP ratio could potentially decline to the 3% range in coming years.

The report states that the Treasury Department has not yet officially reported the annual deficit figure. However, according to Congressional Budget Office estimates released last week, the U.S. fiscal 2025 deficit fell only slightly to $1.817 trillion despite a $118 billion increase in customs revenue from Trump’s tariffs.

“The deficit-to-GDP, which is the important number, now has a five in front of it,” Bessent reportedly stated at the CNBC event. When questioned if he anticipated the ratio reaching the 3% range, he responded, “Yes, it’s still possible,” adding that the ratio would decline if the United States could “grow more, spend less, and constrain spending.”

Broader Economic Context

The shutdown discussion occurs alongside other significant economic developments, including what some industry leaders describe as a U.S. manufacturing renaissance. Meanwhile, technological advancements continue across sectors, with states moving to regulate AI-generated police reports and companies launching new AI-enhanced technology products.

The entertainment sector also shows growth, with reports indicating an award-winning indie game expanding to new platforms, while international trade dynamics evolve as European voters reportedly reject additional trade tariffs.

This coverage is based on reporting by Reuters journalists David Lawder and Andrea Shalal, with writing by Dan Burns and David Lawder, and editing by Paul Simao and Andrea Ricci.

This article aggregates information from publicly available sources. All trademarks and copyrights belong to their respective owners.

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