The ongoing two-week federal government shutdown in the United States may be costing the economy up to $15 billion per week, a Treasury official clarified on Wednesday, correcting an earlier statement by Treasury Secretary Scott Bessent that had incorrectly estimated the cost at $15 billion per day.
Bessent had used the inflated figure in two public appearances earlier on Wednesday, urging Democrats to “be heroes” and work with Republicans to end the shutdown. The corrected estimate is based on a report by the White House Council of Economic Advisers.
Speaking at a news conference, Bessent said the shutdown is starting to “cut into the muscle” of the U.S. economy. He noted that investment in areas such as artificial intelligence is robust and sustainable, but the shutdown is increasingly becoming a barrier to growth.
“There is pent-up demand, but then President Trump has unleashed this boom with his policies,” Bessent said at a CNBC event on the sidelines of the International Monetary Fund and World Bank annual meetings in Washington. “The only thing slowing us down here is this government shutdown.”
Bessent added that incentives in the Republican tax law and tariffs would continue to fuel investment and economic growth. Drawing parallels with historical booms, he said, “I think we can be in a period like the late 1800s when railroads came in, like the 1990s with the internet and office tech boom.”
U.S. Deficit Shows Signs of Decline
Bessent also reported that the U.S. fiscal year 2025 deficit, which ended September 30, was smaller than the $1.833 trillion deficit of the previous year. While he did not provide exact figures, he suggested that the deficit-to-GDP ratio could fall to the 3% range in coming years, down from the current “five in front of it,” referring to a ratio in the 5% range.
The Congressional Budget Office had estimated that the fiscal 2025 deficit fell only slightly to $1.817 trillion, despite a $118 billion increase in customs revenue from Trump’s tariffs.
Bessent emphasized that reducing the deficit-to-GDP ratio is possible through strategies such as growing the economy, reducing spending, and constraining government expenditures.
Source: Reuters
