Feds Estimate Trump's Shutdown Cost Economy $11B

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The partial shutdown of the government reduced federal spending by about $3 billion and cut into overall USA economic growth, according to a report released Monday by the nonpartisan Congressional Budget Office.

The Congressional Budget Office Report predicts a $118 billion increase over last year's $779 billion deficit.

The CBO said that prior to the shutdown it expected the United States economy to grow by about 2.3% in 2019, slowing from 2018 as a boost from federal spending and 2017 tax cuts fades.

In a separate report, CBO estimated the five-week partial government shutdown, which ended January 25, will reduce inflation-adjusted gross domestic product in the fourth quarter of 2018 by $3 billion, or 0.1 percent, and in the first quarter of 2019 will be cut by $8 billion, or 0.2 percent, compared to what it would have been without a government closure. The CBO says the shutdown will have a modest negative impact on the economy, lowering projections of economic growth by 0.4 percentage points to 2.1 per cent in the first quarter, though the economy is expected to mostly make up for it over the rest of the year.

Some 800,000 federal employees were furloughed or required to work without pay during the shutdown.

The CBO noted that eventually the losses will be recovered, except for $3 billion dollars which it said is permanently lost.

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The longest shutdown in USA history ended on Friday when Trump and Congress agreed to temporary government funding - without money for his wall.

Republican Trump had demanded that legislation to fund the government contain $5.7 billion for his long-promised wall along the US-Mexico border. More significant effects will be felt by individual businesses and workers, particularly those who went without pay. In an interview with The Wall Street Journal, the president said he thought there was a "less than 50-50" chance that lawmakers would come to a deal before the February 15 deadline.

The CBO's analysis does not include some indirect effects of the shutdown, such as the halt in some federal permits and reduced access to loans.

"Government is open again, but we can not forget what shutdowns mean: unnecessary anguish for millions of Americans", said Rep. Madeleine Dean of Pennsylvania in a tweet. That caused them to spend less at "private-sector entities", some of which "will never recoup that lost income", the report says.

The five-week shutdown delayed approximately $18bn in federal discretionary spending for compensation and purchases of goods and services and suspended some federal services.

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