Government shutdown could cost economy $14 billion: CBO

Not only are federal food benefits set to run out on Saturday, but the U.S. economy could lose up to $14 billion due to the ongoing government shutdown. 

The shutdown will have a “negative effect on the economy that will mostly, but not entirely, reverse once the shutdown ends,” the Congressional Budget Office said in a new report Wednesday.

The analysis looks at three scenarios: a four-week shutdown ending Oct. 29, a six-week shutdown ending Nov. 12 and an eight-week shutdown ending Nov. 26. 

Thursday marks Day 30 of the shutdown, with Democrats and Republicans still at an impasse on how to fund the government.

By the end of 2026, the gross domestic product — the sum of all goods and services produced in the U.S. — would lose $7 billion if the shutdown ends this week, $11 billion if it ends in mid-November and $14 billion if it ends at the end of November, according to the report.

In the three scenarios, the agency analyzed, the shutdown leads to a temporary economic slowdown, in part driven by lower federal spending on Supplemental Nutrition Assistance Program or SNAP benefits.

SNAP, formerly known as food stamps, provides food benefits to roughly 42 million people per month.

The Agriculture Department, which runs the program, posted a website notice that says no SNAP benefits will be issued on Saturday due to Senate Democrats voting down funding for the food stamp program.

Last month, the House passed a temporary spending bill, known as a continuing resolution or “CR,” and Senate Democrats have filibustered it, keeping the federal government shut down. The bill would fund the government, including federal benefits, through Nov. 21.

“For Democrats, there’s a much easier option on the table: Just go do your job and fully fund all these programs and all these categories of people by voting for the CR,” Mr. Johnson said Wednesday.

Senate Democrats want the Trump administration to tap $5 billion in contingency funding, created by Congress to fund SNAP in the event of emergencies. The administration said it doesn’t have the legal authority to do so.

Sen. Bernard Sanders, a democratic socialist from Vermont who caucuses with Democrats, demanded Mr. Trump “obey the law” and release the funds.

The contingency fund would not cover the roughly $9 billion monthly cost of the program.

Legislation led by Sen. Ben Ray Lujan, New Mexico Democrat, and another proposed by Sen. Josh Hawley, Missouri Republican, would fund the federal food aid program during the shutdown. It has yet to be voted on.

Mr. Trump suggested his administration may find a way to fund SNAP, he told reporters aboard Air Force One during his trip to Asia, but did not offer details.

The Agriculture Department initially said the administration is legally obligated to pay SNAP benefits during a government shutdown, according to a since-deleted Lapse of Funding Plan. Later, the department claimed that the contingency fund is meant for emergencies such as natural disasters, not the current shutdown.