U.S. Treasury Revises Shutdown Cost Estimate: $15 Billion Weekly, Not Daily
A Treasury official corrects Secretary Scott Besant’s earlier statement, saying the ongoing federal government shutdown could cost the U.S. economy up to $15 billion per week in lost output.
A U.S. Treasury official said that the ongoing federal government shutdown, now in its second week, could cost the U.S. economy up to $15 billion per week in lost output — correcting an earlier statement by Treasury Secretary Scott Besant, who had estimated the losses at up to $15 billion per day.
According to Reuters, Besant used the incorrect estimate in two separate appearances earlier on Wednesday, urging Democrats to “be heroes” and join Republicans in ending the shutdown.
A Treasury official later clarified that the corrected figure was based on a report issued by the White House Council of Economic Advisers.
Economic Impact
At a press conference, Besant acknowledged that the shutdown has begun affecting the U.S. economy, even as the country continues to experience a wave of investment — particularly in artificial intelligence and advanced technologies.
He told CNBC, on the sidelines of the IMF and World Bank annual meetings in Washington, that “there is pent-up demand, but President Donald Trump has unleashed that demand with his policies.”
“The only thing slowing us down right now is the government shutdown,” Besant added.
He emphasized that the Republican tax incentives and Trump’s tariffs would continue to sustain the investment boom and fuel ongoing economic growth.
Besant compared the current period of technological expansion to historic eras of innovation, saying:“I think we could be in a period like the late 19th century with the rise of railroads, or the 1990s when we saw the internet and the beginning of the tech boom.”
Budget Deficit Outlook
Besant also stated that the U.S. budget deficit for fiscal year 2025, which ended on September 30, was smaller than last year’s deficit of $1.833 trillion.
Although he did not provide a specific number, Besant indicated that the deficit-to-GDP ratio could fall to around 3% over the next few years.
The Treasury Department has not yet released the official annual deficit figure, but the Congressional Budget Office (CBO) last week estimated the 2025 deficit at $1.817 trillion, slightly lower than the previous year. This decline came despite an additional $118 billion in tariff revenues generated by Trump’s trade policies.
Speaking at CNBC’s event, Besant said:“The deficit as a share of GDP — that’s the important number — now begins with the number five.”
When asked if he hopes to see the deficit ratio begin with a “three,” Besant replied:“Yes, that’s still possible,” adding that the U.S. could achieve it “by growing more, spending less, and tightening expenditure.”
Conclusion:
The updated Treasury estimate underscores the growing economic risk of the prolonged government shutdown, even as officials remain optimistic about long-term U.S. growth driven by AI investment, tax reforms, and trade policies. However, the message from Secretary Besant is clear: unless the shutdown ends soon, America’s economic momentum could face significant strain.
