A halt in small business loans, lost tourism to national parks, and even a delay in the Alaskan crab season were among the costly effects of last month’s government shutdown, according to the Office of Management and Budget (OMB).
An OMB report released last week also states that the government will pay $2.5 billion in back pay and benefits to federal employees, who were furloughed for a total of 6.6 million days.
The report said the shutdown would lower 4th quarter real GDP growth by between .2 and .6 percentage points. Among the stopped government services: The delivery of $4 billion in tax refunds, the processing of disability claims for veterans, and responding to income-verification requests from banks — which hurt lending to small businesses and individuals.
Last week also brought some good news, however: Despite the shutdown, the October jobs report showed that the economy added 204,000 jobs last month. The job creation figures for August and September were revised upward as well.
Members of the budget conference committee should heed the report and commit themselves to avoiding another harmful shutdown early next year by forging a bipartisan agreement that funds the government for the rest of Fiscal 2014.
External links:
Impacts and Costs of 2013 Government Shutdown (OMB)
October Jobs Report (Bureau of Labor Statistics)
Blog Post On Shutdown Report (OMB)
Blog Post on October Jobs Report (Council of Economic Advisors)
