By Sam Stein
WASHINGTON — The federal government shutdown that lasted for 16 days last month is expected to cost the U.S. economy between $2 billion and $6 billion in economic output, according to a report by the Office of Management and Budgetreleased Thursday afternoon.
Those figures, culled from independent forecasters, may be a conservative estimate, the authors note. They found that approximately 120,000 fewer private sector jobs were created during the first two weeks of October because of the dual threats of the shutdown and the standoff over the debt ceiling. Forecasters additionally expect fourth quarter real GDP growth to be 0.2 to 0.6 percent lower than what it could have been had the shutdown and debt ceiling fight not taken place.
By Carrie Dunn, Political Reporter,NBC News
According to the Office of Management and Budget, the two shutdowns in 1995 and 1996 cost taxpayers $1.4 billion combined. Adjust for inflation and you’ve got $2 billion in today’s dollars.
Those two shutdowns lasted a total of 27 days, but there’s no telling how long the government could be shuttered this time around if Congress fails to act by Monday at midnight. Even shorter shutdowns have proven successful at draining government funds.
In the immediate aftermath of the first government shutdown in 1981, the most conservative estimate – conducted by the General Accounting Office (now called the Government Accountability Office) — put the cost of shutting the government down for a single day at $8.2 million, or almost $21 million in today’s dollars. A House panel later concluded that the day-long furlough cost taxpayers 10 times more than that.
National News Alert
According to Bloomberg, President Barack Obama plans to name White House Chief of Staff Jack Lew tomorrow as his choice for Treasury secretary, replacing Timothy F. Geithner, a person familiar with the process said.
Lew, 57, who also has served as director of the Office of Management and Budget, has been offered the Treasury post by Obama, according to the person, who asked for anonymity to discuss personnel matters.
‘Big, dumb spending cuts:’ that no one wants but everyone might get By Jane C Timm via Lean Forward – Fri Sep 14, 2012 9:25 PM EDT
The automatic cuts were mandated by law after the Super Committee failed to institute cuts after raising the debt ceiling to avoid defaulting and include automatic spending cuts to domestic and defense programs across the board, with little discretion as to where the cuts are instituted.
“The whole point of this is that it’s supposed to be so mindless and stupid that everyone finds it unacceptable,” explained Bob Greenstein, the executive director of the Center on Budget and Policy Priorities.
The cuts would kick in at the start of next year unless Congress acts.
“The only thing Congress would need to do to prevent these big, dumb cuts that no one wants is to agree on an equivalently-sized deficit reduction package they’d prefer of smarter cuts,” said Ezra Klein, guest host of The Ed Show on Friday. “But thus far because they’re Congress and they’re terrible at their jobs that has not happened.”