A Treasury official clarified on Wednesday that the ongoing two-week federal government shutdown may be costing the US economy up to $15 billion per week in lost output, not per day, as Treasury Secretary Scott Bessent had mistakenly claimed earlier in two separate appearances.
Bessent had urged Democrats to “be heroes” and join Republicans in ending the shutdown, using the incorrect daily estimate. The revised weekly figure, the official noted, is based on analysis from the White House Council of Economic Advisers, as reported by Reuters.
Bessent told a news conference that the shutdown was starting to “cut into the muscle” of the US economy.
The wave of investment into the U.S. economy, including into artificial intelligence, is sustainable and is only getting started, but the federal government shutdown is increasingly an impediment, Bessent said.
“There is pent-up demand, but then President (Donald) Trump has unleashed this boom with his policies,” Bessent said at a CNBC event held on the sidelines of the International Monetary Fund and World Bank annual meetings in Washington.
“The only thing slowing us down here is this government shutdown,” Bessent said.
He said that incentives in the Republican tax law and Trump’s tariffs would keep the investment boom going and fuel continued growth.
“I think we can be in a period like the late 1800s when railroads came in, like the 1990s when we got the internet and office tech boom,” Bessent said.
US deficit has shrunk, says Bessent
Bessent also said that the U.S. deficit for the 2025 fiscal year ended September 30 was smaller than the $1.833 trillion deficit posted in the prior fiscal year. He did not provide a figure, but said that the deficit-to-GDP ratio could come down to the 3% range in the coming years.
The Treasury Department has not yet reported the annual deficit figure.
The Congressional Budget Office estimated last week that the U.S. fiscal 2025 deficit fell only slightly to $1.817 trillion despite a $118 billion jump in customs revenue from Trump’s tariffs.
“The deficit-to-GDP, which is the important number, now has a five in front of it,” Bessent said at the CNBC event.
Asked if he wanted to see a three at the start of the deficit-to-GDP ratio, Bessent said, “Yes, it’s still possible.”
He added that the ratio would come down if the U.S. could “grow more, spend less, and constrain spending.”
Judge temporarily blocks Trump administration from firing workers
Federal judge temporarily blocked President Donald Trump’s administration from firing workers during the government shutdown, saying the cuts appeared to be politically motivated and were being carried out without much thought.
U.S. District Judge Susan Illston in San Francisco repeatedly pressed the assistant U.S. attorney to explain the administration’s rationale for the more than 4,100 layoff notices that started going out Friday even though furloughed workers can not access their work emails and there are no human resources specialists to assist with next steps.
“It’s very much ready, fire, aim on most of these programs, and it has a human cost,” she said. “It’s a human cost that cannot be tolerated.”
The government shutdown, which began on October 1, was triggered after Democrats blocked a short-term funding bill, demanding it include an extension of federal health insurance subsidies under the Affordable Care Act. These subsidies are set to expire at year’s end, potentially raising monthly costs for millions of Americans.
President Trump and Republican leaders have said they’re open to negotiating the subsidies but insist the government must reopen first.
The only thing slowing us down here is this government shutdown.
It’s very much ready, fire, aim on most of these programs, and it has a human cost.
With both sides refusing to compromise, the path to ending the shutdown remains unclear.
(With inputs from agencies)