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Federal Shutdown Could Cost Economy Up to $14 Billion
2025-10-30 04:40:14
Economy
Finance

Federal Shutdown Could Cost Economy Up to $14 Billion

The ongoing federal government shutdown threatens to inflict substantial economic damage, with projected losses between $7 billion and $14 billion. According to the congressional budget office, the shutdown could also reduce GDP by up to two percentage points in the fourth quarter of 2025. The financial ramifications vary, with losses escalating the longer the shutdown continues.

Despite this, financial markets have shown surprising resilience, with the S&P 500 achieving record highs. The shutdown's effects are beginning to ripple through, potentially impacting hundreds of thousands of workers.

Political maneuvering has led to some funds being redirected to ease immediate pain for certain groups, but larger structural issues remain, including rising healthcare costs linked to legislative disagreements. As the situation evolves, the uncertainty surrounding its economic repercussions continues to grow.

Related news on that topic:

How is the 28-day government shutdown impacting federal programs ... and markets?

The US government shutdown has now extended into its 28th day, revealing a stark division within Congress over federal spending legislation. Senate Republicans and Democrats are at an impasse, primarily over healthcare funding and cuts initiated during the Trump administration. This stalemate is not only affecting government workers but also threatening essential programs like the Supplemental Nutrition Assistance Program. Economic indicators, surprisingly, show resilience, with the S&P 500 hitting record highs, despite concerns about the long-term implications of this dysfunction. Experts remain divided on how these political tensions impact financial markets. As negotiations continue, lawmakers face increasing pressure to reach a consensus, especially with significant economic repercussions looming and the upcoming Obamacare enrollment period on the horizon.

Federal Shutdown Threatens SNAP for 42 Million Amid State ... Emergency Responses

The looming federal government shutdown poses a significant threat to the Supplemental Nutrition Assistance Program (SNAP), putting 42 million low-income Americans at risk of losing vital food assistance. In response, several states, including Louisiana and New York, have mobilized emergency funding to support food banks and avoid hunger crises. Louisiana Governor Jeff Landry has allocated $150 million, while New York has declared a state of emergency to distribute $65 million for food aid. Other states, like California and Illinois, are also stepping in with their own funds to assist those in need. The Trump administration's refusal to utilize available emergency funds exacerbates the situation, prompting legal actions from over two dozen states. As negotiations in Congress continue, the urgency to resolve the standoff grows, with rising healthcare costs and halted nutrition benefits threatening millions. Lawmakers face immense pressure to reach an agreement before the potential impact of the shutdown deepens, risking widespread hunger and malnutrition.

Read 2 more recent news on this topic

The press radar on this topic:

The Street
30. Oktober 2025 um 12:18

U.S. shutdown could send shockwaves beyond politics

The US government entered a partial shutdown due to congressional gridlock on federal spending, putting hundreds of thousands of employees at risk of furlough. Financial markets have surprisingly reacted well, with the S&P 500 reaching record highs and Bitcoin remaining stable despite brief dips. Experts in the crypto sector are divided on the long-term impact, with some arguing that digital assets are insulated from government dysfunction and others warning of potential risks to market stabil..
The Guardian
29. Oktober 2025 um 22:08

Government shutdown could cost $14bn, congressional forecaster predicts - US politics live

The government shutdown has caused significant economic damage, with between $7bn and $14bn in GDP at risk. Democrats accuse Republicans of using people who rely on Snap as hostages. President Donald Trump's administration is planning to revamp the leadership of Immigration and Customs Enforcement (ICE). Trump will meet with Chinese president Xi Jinping on Thursday to discuss trade. A federal judge has blocked the deployment of national guard troops in Portland, Oregon.
New York Times - Politics
29. Oktober 2025 um 22:29

More Americans May Soon Feel the Shutdown’s Effects

The Trump administration's budgetary maneuvers have alleviated pain for select groups during the government shutdown. Russell Vought's 'budgetary Twister' has redirected funds to keep certain groups paid. Devin O'Connor criticizes this move as dubiously legal. Democrats argue Republicans' refusal to extend health care subsidies under the Affordable Care Act drives up insurance costs, as seen in Sue Monahan's plan. President Trump's potential third term is being discussed, with some questioning..
The Guardian
29. Oktober 2025 um 18:14

US could lose between $7bn and $14bn during shutdown, budget office says

The US is set to lose between $7bn and $14bn due to the ongoing federal government shutdown, according to a report by the congressional budget office. The report also estimates that the shutdown will reduce GDP by 1-2 percentage points in the fourth quarter of 2025. The effects on the economy are uncertain, but a longer shutdown would exacerbate losses, with $7bn lost if the government opens this week, $11bn after six weeks, and $14bn after eight weeks.
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