President Donald Trump’s economic advisers are warning that a prolonged shutdown could lead to serious economic consequences, according to a White House memo obtained by POLITICO.
The U.S. could lose $15 billion of its growth domestic product each week the shutdown extends, with a monthlong shutdown leading to an additional 43,000 unemployed people, the Council of Economic Advisers’ warned in the memo. That damage does not account for the 1.9 million federal civilian employees who are either furloughed or working without pay, 80 percent of whom live in the Washington area.
White House aides say the document, which will be sent to Hill Republicans, will be used to inform the Republican messaging response to the shutdown. Congress is divided on the fate of funding for Obamacare health insurance subsidies, which the administration has falsely claimed would go to undocumented immigrants.
“The very real economic consequences of a prolonged government shutdown are entirely on Senate Democrats who are holding the federal government, economy, and country hostage to give illegal immigrants free health care,” White House spokesperson Kush Desai said in a statement.
It comes as White House works to orchestrate a unified Republican response to the government shutdown across all levels of government — and pin the blame squarely on Democrats. Recent polls show that voters are placing more blame on Republicans than Democrats at this point — though significant numbers of Americans say both parties are responsible.
It also comes at a time of increased economic scrutiny over the impact of the president’s tariff policies, with data released by the payroll company ADP on Wednesday showing the U.S. shed 32,000 private-sector jobs in September.
The four-page Council of Economic Advisers memo estimates a monthlong shutdown would reduce consumer spending by $30 billion, half from direct impacts to federal employees and the rest from spillover effects to other sectors. The memo leans on other analyses from Goldman Sachs, Fiserv and the Federal Reserve in reaching its conclusions.
“CEA analysis indicates that the shutdown may have wide-ranging economic effects that reduce American prospects through lower growth, higher unemployment, as well as disruptions to social security, air travel, and nutritional support to women with infant children,” the memo says. “These effects will intensify the longer the shutdown lasts.”
The memo maps out many real-world consequences of a government shutdown: The Women, Infants and Children program will run out of funding in October; Social Security and Medicare beneficiaries may experience longer customer service wait times; and Head Start programs up for annual review and funding will not receive funding.
While TSA employees and air traffic controllers will work without pay during the shutdown, the memo notes that absenteeism, which tripled during past shutdowns from 3 to 10 percent, could cause cascading delays at airports across the U.S.