Show Me the Money! Sen. Warner Wants Shutdown Cost Data

Money

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Sen. Mark Warner (D-Va.) wants a price tag fixed to the partial government shutdown. In a Thursday letter sent to the Government Accountability Office, he asked for a study to understand the full impacts of the shutdown. Warner chairs the Senate Budget Committee’s Government Performance Task Force and has served in the Senate since 2008. If the GAO complies with his request, it will be the latest data in a string of estimates.

Before the shutdown, Moody’s Analytics chief economist and co-founder Mark Zandi submitted a written testimony to the Joint Economic Committee. By Zandi’s estimates, “shutting the government down for three or four weeks would do significant economic damage, reducing real GDP by 1.4 percentage points in the fourth quarter.”

Ratings agency Standard & Poor’s analyzed the economic impact on October 16. The firm expects that in the fourth quarter, the U.S. economy will lose out on $24 billion. This figure represents a 0.6 percent loss in gross domestic product growth due to the shutdown.

On Tuesday came the White House’s figures, calculated by the Council of Economic Advisors. The group tracked eight indicators and concluded that the data from those numbers corroborated the estimate of reducing expected GDP growth for the fourth quarter by one-quarter of a percentage point as a result of the shutdown. It also calculated that for the first two weeks of October, 150,000 private sector jobs were lost.

Finally, amid all the estimates for the current shutdown, there is also a comparison to the cost of the previous government shutdown. The Congressional Research Service estimated in 1997 that the Clinton-Congressional standoffs cost about $1.4 billion. The cost was calculated based on the 27 days governmental operations were shuttered.

So why add to the din of voices already estimating and evaluating? Warner wrote in his letter, “The best way to prevent another unnecessary shutdown is to better understand how this irresponsible action fully impacted our economy.” The numbers from Moody’s came before the shutdown and Standard & Poor’s data came a bit later, but still before the full impact could be realized. The White House’s numbers may be entirely correct, but in this partisan era, it is also possible they won’t be seen as emanating from a reputable source.

The Government Accountability Office is a nonpartisan, independent agency, often seen as a Congressional watchdog. The Comptroller General of the U.S. heads the agency and is appointed by the president based off a list of candidates chosen by Congress. A thorough GAO investigation could, like Warner wishes, prevent another shutdown by accurately understanding the most recent one.

Below are the estimates by the Federal Reserve for GDP growth before the shutdown began.

FOMC Projection GDP

Don’t Miss: The Shutdown Takes Its Toll on U.S. Manufacturing.