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A two-week shutdown of the federal government could cost the U.S. economy up to $15 billion a week, not $15 billion a day, as Treasury Secretary Scott Besant mistakenly claimed earlier in two separate presentations, a Treasury official clarified Wednesday.
Besant, using the inaccurate daily estimate, urged Democrats to “be heroes” and join with Republicans in ending the shutdown. The official said the revised weekly figure is based on an analysis by the White House Council of Economic Advisers, as reported by Reuters.
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Besant said at a press conference that the shutdown was starting to “cut the muscle” of the US economy.
Bessant said the wave of investment in the U.S. economy, including artificial intelligence, is sustainable and has just begun, but the federal government shutdown is quickly becoming a hindrance.
“There is pent-up demand, but then-President (Donald) Trump has fueled this boom with his policies,” Besant said at a CNBC event on the sidelines of the annual meetings of the International Monetary Fund and the World Bank in Washington.
“The only thing slowing us down here is this government shutdown,” Besant said.
He said the stimulus from the Republican tax law and Trump’s tariffs will continue to spur investment and spur continued growth.
“I think we could be like the late 1800s when the railroads came in, like the 1990s when we got the Internet and office technology boom,” Bessant said.
Besant says, American deficit has reduced
Besant also said the US deficit for fiscal year 2025 ending September 30 was lower than the $1.833 trillion deficit recorded in the previous fiscal year. He did not give any figures, but said the deficit-to-GDP ratio could fall to the 3% range in the coming years.
The Treasury Department has not yet disclosed the annual deficit figure.
The Congressional Budget Office estimated last week that the U.S. fiscal 2025 deficit would narrow slightly to $1.817 trillion, despite a $118 billion increase in customs revenues from Trump’s tariffs.
“Deficit-to-GDP, which is the important number, now has a five in front of it,” Besant said on the CNBC program.
Asked whether she would like to see the deficit-to-GDP ratio initially rise to three, Besant said, “Yes, that is still possible.”
He said the ratio would go down if the US could “grow more, spend less, and limit spending.”
Judge temporarily blocks Trump administration from firing employees
A federal judge has temporarily blocked President Donald Trump’s administration from laying off workers during the government shutdown, saying the cuts appear to be politically motivated and being made without much thought.
U.S. District Judge Susan Illston in San Francisco repeatedly pressed the assistant U.S. attorney to explain the administration’s reasoning for more than 4,100 layoff notices to be issued Friday, even though furloughed workers cannot access their work email and have no human resources specialist to assist with next steps.
“For most of these programs it’s very tailored, proactive, and it has a human cost,” he said. “This is a human cost that cannot be tolerated.”
The government shutdown, which began on October 1, began when Democrats blocked a short-term funding bill that sought to include an expansion of federal health insurance subsidies under the Affordable Care Act. These subsidies are set to expire at the end of the year, potentially increasing monthly costs for millions of Americans.
President Trump and Republican leaders have said they are open to talks on subsidies, but insist the government must reopen first.
The only thing slowing us down here is this government shutdown.
For most of these programs it is very tailored, proactive, targeted and has a human cost.
With both sides refusing to compromise, the path to ending the shutdown remains unclear.
(with inputs from agencies)
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