The United States took a major economic hit from the 2.5 week government shutdown, including a loss of $4.5 billion in lost productivity and worker benefit compensation, according to a report issued Nov. 7 by the Office of Management and Budget.
In a press call Thursday, OMB Director Sylvia Burwell explained to reporters the direct and indirect impacts the government shutdown had on the economy, programs, services and the workforce.
“We tried to do two things as much as possible; we’ve tried to be as transparent as possible and correct analytically and specifically as possible,” Burwell said of the process of going through shutdown data.
A major cost measured in the report was the pay for furloughed feds, meaning the amount paid to furloughed employees for work and services that could not be performed. The report estimated the total cost of pay for furloughed feds during the shutdown is roughly $2 billion. However, total compensation cost when including benefits is about 30 percent more, around $2.5 billion.
The report estimated 6.6 million federal working days were lost, most notably 1.6 million from the Defense Department.
The number of job creation opportunities was severely affected by the shutdown, according to the report. Several projects were held up in production; for example, the Bureau of Land Management was unable to process roughly 200 drilling permits, delaying energy development and thus employment opportunities in several states.
Small businesses suffered when the Small Business Administration was unable to handle $140 million worth of applications for small business loans. Small businesses contracting with the federal government, especially with the Defense Department, also took a hit. Contracts dropped by almost one-third, and spending saw a 40 percent reduction.
“Now the one thing that came out of the shutdown was a greater appreciation of what the government did,” Burwell said. “People did understand things in their daily lives that were interrupted, whether they were economic or personal interruptions.”
The National Park Service lost a total of $7 million in revenue, and the Smithsonian lost roughly $4 million during the shutdown.
“The shutdown jeopardized both the income stability of federal employees and their ability to focus on important agency missions,” the report said.
About 40 percent of the federal workforce was furloughed during the shutdown.
The instability of federal work undermined the government’s competitive advantage in gaining and retaining accomplished employees, the report said.
