A government shutdown could force as many as 750,000 federal employees off the job each day, at a cost of roughly $400 million in lost compensation, the nonpartisan Congressional Budget Office said in a new report.
The projections, sent to lawmakers on Tuesday, highlight the sweeping consequences of a lapse in federal funding that could begin as soon as midnight, when current appropriations are set to expire. While legislation passed in 2019 guarantees back pay for federal employees once a shutdown ends, the CBO warned that a prolonged delay in paychecks could ripple through households and local economies, cutting consumer spending and disrupting services across the country.
Unless lawmakers strike a deal by midnight, the federal government will begin its first shutdown in nearly seven years.
Under contingency plans filed with the Office of Management and Budget, agencies would furlough hundreds of thousands of employees deemed nonessential. Furloughed workers are barred from doing their jobs and normally do not receive back pay until funding is restored. But the White House has signaled that it could go further during this shutdown than previous ones. In a letter to agencies last week, the budget office instructed them to prepare for possible layoffs if the impasse drags on. Trump, speaking Tuesday, said his Administration “may do a lot” of firings, blaming Democrats for the standoff.
During the last government shutdown, which began during Trump’s first term in 2018 and lasted 34 days, about 380,000 federal workers were furloughed, while another 420,000 worked without pay. But that shutdown was partial, since Congress had already funded several major departments, including Defense and Veterans Affairs. This time, virtually the entire government would be affected.
The CBO report cautioned that the broader economic effects of a shutdown would hinge on its duration and the Trump Administration’s choices about which activities to keep running. During the 2018-2019 shutdown, the U.S. economy suffered a permanent loss of roughly $3 billion, the CBO said.
Read more: Here’s Why Both Sides Expect to ‘Win’ the Shutdown
The showdown comes at a politically fraught moment between congressional leaders and the White House. Senate Democrats say they will not vote to extend government funding without also preserving expanded Affordable Care Act subsidies, which are set to expire at year’s end, and undoing health care cuts enacted as part of Republicans’ sweeping tax package this summer. Republicans, who control the chamber by a narrow margin, insist Democrats are exploiting the deadline to force unrelated concessions.
“It’s only the President who can do this. We know he runs the show here,” Senate Minority Leader Chuck Schumer said Tuesday, accusing Trump of trying to “bully” Democrats by refusing to negotiate.
While standoffs over spending have become routine in Washington, a shutdown of this scale has not occurred since 2013, when about 850,000 federal workers were furloughed. Then, as now, federal employees became the most visible casualties of a political fight far removed from their paychecks and daily lives.
