Republicans Are Costing the Economy $15 Billion a Week to Avoid Funding Healthcare

Trump administration officials have put forward a figure of $15 billion per week to estimate how much the government shutdown, which has now lasted 20 days, is costing the U.S. economy.

Treasury Secretary Scott Bessent spoiled those numbers in an interview with CNBC last Wednesday, touting them as a staggering $15 billion a year. day and caused a headline frenzy before the Treasury Department issued a statement correcting its top official. Regardless, the Trump administration and Hill Republicans are seeking to use the cost of the shutdown as a messaging tool against their opponents.

But if money really was the problem, they would be better off funding the vital health care program at the heart of the shutdown.

Democrats are refusing to vote for a budget bill that does not include an extension of the Affordable Care Act’s enhanced premium tax credits, which are expected to cost $350 billion over 10 years, according to the Congressional Budget Office, and lead to insuring 3.8 million more people. Extending the credits for just one year would cost about $30 billion, Daniel Hornung, a policy researcher at the Stanford Economic Policy Research Institute, told TPM.

“I think there are important discussions to be had about how you can make the health care system more efficient,” said Hornung, a former deputy director of the National Economic Council. “I think right now, though, given where we are, what we need to do is expand these credits so people’s premiums don’t go up.”

A person earning $45,000 would see their health care costs increase by more than $1,800, according to an analysis by the Bipartisan Policy Center, a D.C. think tank. A family of four with a household income of $90,000 would see an increase of more than $3,700 in their health care premiums, which represents more than 4% of their total annual income.

The cost of the shutdown is largely due to reduced spending related to the at least 700,000 federal workers on leave without pay. These effects are not expected to be permanent, according to economists who analyzed the shutdown. An S&P Global analysis indicates that shutdowns “generally have only a marginal effect on the economy as a whole.” Each week that federal workers go unpaid drops GDP by about a tenth of a percentage point, Alec Phillips, chief U.S. policy economist at Goldman Sachs Research, said on the company’s podcast, but those losses are expected to be recouped when employees return to work the following quarter. According to a CBO analysis of the 2019 partial shutdown under Trump I, the nation’s GDP was reduced by $3 billion and private sector businesses were unable to recoup some of the money they lost due to the government spending shutdown.

“Most economists would tell you that the economic impact of a shutdown is minimal if when the government reopens, people get their salaries back, etc.,” Hornung told TPM.

The Trump administration has threatened to withhold back pay from furloughed workers, an unprecedented step that would certainly result in lawsuits. The move would also jeopardize any expected economic rebound from the shutdown, which depends largely on the ability of federal workers to recover and spend their money. Trump has already made good on his promise to use the shutdown to lay off more workers and shut down “Democratic programs,” although the Department of Health and Human Services immediately rushed to rehire hundreds of workers it had laid off and a federal judge halted Trump’s other layoffs for now after unions sued the administration.

According to Will McBride, estimates of the cost of the shutdown coming from the White House may be real, but Bessent is also likely using those numbers to temper expectations about likely missed economic targets, particularly regarding 3% annual GDP growth.

“I think he’s primarily trying to identify a real problem, which is going to make this goal more difficult, and which Bessent believes is caused by the Democrats,” McBride, chief economist at the Tax Foundation, a conservative economic think tank, told TPM. “So I think that gives him a way to explain what I think is most likely to be a failure in achieving his very lofty and ambitious goals.”

McBride released a report arguing for lower federal spending on health care and called the spending “unsustainable.” But, McBride said, “keeping the government closed is certainly a bad and costly outcome.”

According to Hornung, notices have already started going out to people who rely on tax credits informing them that their contributions will increase. Meanwhile, recent polling suggests that Republicans are getting more blame for the shutdown than Democrats.

An AP/NORC poll conducted between October 9 and 13 found that 58% of respondents blame Trump and Republicans for the shutdown, compared to 54% who blame Democrats. An Economist/YouGov survey released October 14 found that 39% of Americans believe the shutdown is the Republican Party’s fault, compared to 33% who blame Democrats.

Voter anger heading into the midterm elections and a costly shutdown could be a high price to pay for Republican officials, especially if they end up accused of raising health care costs.

“Republicans have shut down the government because they don’t want Americans to have access to affordable health care,” Sen. Angela Alsobrooks (D-MD), who serves on the Senate Health, Education, Labor and Pensions Committee, said in a statement to TPM. “This Republican shutdown is costing taxpayers billions of dollars.”