White House Claim: Government Shutdown Cost Billions, GDP Growth

By:  Thomas R. Eddlem
11/11/2013
       
White House Claim: Government Shutdown Cost Billions, GDP Growth

The White House released a claim that the October government "shutdown" will end up costing over $2 billion and puts the blame on conservatives.

The partial government shutdown in October will end up costing taxpayers more than $2 billion and a quarter percent or more in GDP growth for the U.S. economy this year, claimed a report from the Office of Management and Budget (OMB) released by the Obama White House November 7.

"During the 16-day shutdown,” the OMB reported, “Federal government employees were furloughed for a combined total of 6.6 million days,” amounting to 6.6 million days of paid vacation for federal employees. “We estimate that the total cost of pay for furloughed Federal employees during the period of the shutdown is roughly $2.0 billion. Total compensation costs, including benefits, are about 30 percent larger, in the range of $2.5 billion.”

While the direct cost to the taxpayers is more-or-less straightforward — much of the work not completed by government workers will be done later by employees paid overtime wages, or by temporary workers — the White House's OMB next engaged in the far more speculative claim that the shutdown hurt the larger U.S. economy. “Outside experts estimate that the shutdown will reduce fourth quarter Gross Domestic Product (GDP) growth by 0.2-0.6 percentage points.”

Central to the White House claims of larger damage to the economy are statistics related to delay in various government services, such as the claim that the shutdown

disrupted tourism and travel by closing national parks and the Smithsonian. The National Park Service (NPS) estimates that the shutdown led to over $500 million in lost visitor spending nationwide, a significant economic hit to communities surrounding national parks and monuments.

Prevented hundreds of patients from enrolling in National Institutes of Health (NIH) clinical trials.

Of course, in those cases the White House made a show of spiking these programs during the shutdown. In the case of National Parks, the White House went out and unnecessarily purchased barriers to keep tourists out of national parks — even open-air parks — during the shutdown. 

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