CBO Director Warns Another Shutdown Would Increase Risk of 'Security Incidents'

CBO Director Warns Another Shutdown Would Increase Risk of 'Security Incidents'

The five-week partial United States government shutdown, triggered by the battle over President Donald Trump's border wall, cost the U.S. economy $11bn, according to the latest analysis by the non-partisan Congressional Budget Office (CBO).

Overall, the USA economy lost about $11 billion during the five-week period, the nonpartisan Congressional Budget Office said.

The report, which was released Monday, estimated a hit of $3 billion, or 0.1 percent, to economic activity during the fourth quarter of 2018.

The 35-day shutdown, which arose as a result of a dispute over funding for a U.S. -Mexico border wall favored by President Trump, will cost the U.S. economy $11 billion, according to the CBO's report. The estimates do not include more indirect negative effects of the shutdown, like the inability of businesses to obtain federal permits or difficulties accessing federal loans - factors that were likely beginning to lead organizations to postpone hiring and investment decisions, the office said.

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

Overall, the US economy lost about $11 billion during the five-week period, the report said.

US President Donald Trump ended the impasse on Friday, when he agreed to back a deal to temporarily fund the government until 15 February.




The shutdown, the longest in USA history, was triggered by disagreement over President Donald Trump's demand that Congress include $5.7bn to build a wall along the Mexican border in a new funding bill.

The shutdown was spawned over Trump's demand for $5.7 billion for a border wall to thwart illegal immigration, perhaps his most prominent 2016 campaign pledge during his successful run for the presidency. Democrats oppose any money for a wall but say they back additional funding for security measures along the border.

The fourth quarter of previous year saw economic growth drop by 0.2 percentage points, and the first quarter of 2019 has seen it drop by.4 percentage points.

"Underlying those effects on the overall economy are much more significant effects on individual businesses and workers", the report said.

Trump said he would be willing to shut down the government again if lawmakers do not reach a deal he finds acceptable on border security.

The CBO cautioned that its estimates do not incorporate other indirect negative effects, which are more hard to quantify "but were probably becoming more significant". The loss was due to delayed government spending, lost output from federal workers and reduced demand.

"Some of those private-sector entities will never recoup that lost income", it added.

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