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Marketplace Morning Report

How much do government shutdowns really cost?

Sabri Ben-Achour Sep 27, 2019
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Protesters hold signs during a protest rally by government workers and concerned citizens against the government shutdown on Friday, Jan. 11, 2019 at Post Office Square near the Federal building, headquarters for the EPA and IRS in Boston. The rally was organized by The American Federation of Government Employees. New England has 516 EPA employees that is now down to a staff of 22.
JOSEPH PREZIOSO/AFP/Getty Images

The cost of a government shutdown? According to a report by the Senate Permanent Subcommittee on Investigations, the last three cost the U.S. government $4 billion.

During a shutdown, federal employees still get paid, other costs continue … but no work gets done.

That’s “money down the toilet,” in the words of Mark Goldwein, senior vice president at the Committee for a Responsible Federal Budget.

The subcommittee surveyed 26 federal agencies and recorded at least $3.7 billion in back pay to furloughed workers during the last three shutdowns (2019, 2018, and 2013), and another $338 million in associated costs.

Some work is made up, according to Matthew Shapiro, director of the University of Michigan’s Survey Research Center, who says the estimate still “understates the cost of the shutdown, because of all the indirect effects.”

Effects like restaurants losing business, purchases that were never made and contractors who were never reimbursed. Taking indirect effects into account, the Congressional Budget Office estimates that the last shutdown — the longest in U.S. history, at 35 days — cost roughly $3 billion alone.

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