Taxpayers Get a Whopper of a Bill for the Shutdown

The Fiscal Times

Evidence of the economic carnage wrought by last month’s 16-day partial government shutdown keeps piling up, and it doesn’t make for a pretty picture.

The Office of Management and Budget on Thursday reported that the shutdown cost taxpayers at least $2 billion and resulted in the lost productivity from 850,000 government employees who were furloughed throughout the government crisis.

“The report makes clear that the costs and impacts of the shutdown were significant and widespread, and demonstrates why this type of self-inflicted wound should not occur again,” said Sylvia Mathews Burwell , the director of OMB.T

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This morning the Labor Department blamed a slight uptick in the unemployment rate – from  7.2 percent  to 7.3 percent on the effects of the shutdown, which had little or no impact on the better than expected October job numbers.

The 448 employees who were temporarily laid off were classified as unemployed while furloughed workers, who were ultimately reimbursed for lost wages, were still counted as employed in a separate government payroll survey that counts overall jobs. Consequently, once the dust settles, the government shutdown likely will have had only a negligible impact on the national employment picture.

The White insisted today that regardless of the overall positive findings in the new November employment – with 204,000 jobs added to the workforce -- the government shutdown sparked by GOP intransigence over Obamacare –- inflicted considerable damage to the country.

“The upward revisions to job growth in August and September, combined with solid third quarter GDP growth reported yesterday, suggest that the economy was gaining traction in the months leading up to the government shutdown,” said Jason Furman, chairman of the White House Council of Economic Advisers. “There should be no debate that the shutdown and debt limit brinksmanship inflicted unnecessary damage on the economy in October.”

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The administration has predicted that the government shutdown and attendant dispute over raising the debt ceiling will slow fourth-quarter economic growth by 0.2 percentage points to 0.6 points, or $2 billion to $6 billion in lost economic activity, according to the Washington Post. Officials also have said that the shutdown probably cost 120,000 new private sector jobs during the first two weeks of October.

Among the highlights of OMB’s shutdown low-down report:

  • Federal employees were furloughed for a combined total of 6.6 million days, which is more than in any previous government shutdown.
  • The lost productivity of furloughed workers, totaled $2 billion. Fees went uncollected; and the federal  government had to pay additional interest on payments that were late because of the shutdown.
  • Federal permitting and environmental and other reviews were halted, delaying job-creating transportation and energy projects. Import and export licenses and applications were put on hold, negatively impacting trade.
  • Federal loans to small businesses, homeowners, and families in rural communities were put on hold. Private-sector lending to individuals and small businesses was disrupted, because banks and lenders couldn’t access government income and Social Security Number verification services. Travel and tourism was disrupted at national parks and monuments across the country, hurting the surrounding local economies.
  • Almost $4 billion in tax refunds were delayed.

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