S&P: US government shutdown likely to cost more than Trump’s wall

18 Jan 19

The cost of the US shutdown could exceed the amount of border wall funding Donald Trump is demanding if the impasse drags on into February, a global rating agency has warned.

About a quarter of the federal government was shut down on 22 December in a row over $5.7bn of federal funding for a wall on the border to Mexico, which was one of president Trump’s campaign pledges.

It is now the longest-ever partial government shutdown in US history.

Earlier this week, analysis from S&P Global Ratings suggested that the shutdown had cost the US economy $3.6bn by 11 January – the 21st day of the shutdown.

This suggest it has cost $1.2bn every week. This means, by February the cost of the shutdown could exceed the $5.7bn Trump is asking for. The president is demanding Congress awards him funding for his plans before he allows the government to reopen.

S&P said: “The longer this shutdown drags on, the more collateral damage the economy will suffer.”

According to CNBC, an official from the Trump administration said around 0.1 percentage points are subtracted from economic growth each week of the shutdown.

The Democrats in the House of Representatives have refused to include the money in the 2019 budget, saying the wall is “immoral”.   

The House has passed several spending plans in attempts to re-open the government, which included $1.3bn for border fencing and another $300m for border security items, but Trump vetoed it. 

About 800,000 federal workers have been forced to take leave of absence or are working without pay.

Trump has repeatedly said the “only solution” to re-open the federal government agencies would be for the Democrats to pass a spending bill with money for the border barrier.

He said last week he had agreed to build a steel barriers, as “requested by the Democrats”, rather than concrete wall as previously planned. 

The president has said the wall – or steel fence – is the only way to combat the “humanitarian crisis” at the border.

In a televised address to the nation last week, he said: “Illegal immigrants strain public resources. The federal government remains shut down for one reason, and one reason only. Because the Democrats will not fund border security.”

 

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