White House: U.S. to lose $15 billion in GDP for each week of a government shutdown, per Politico

White House: U.S. to lose $15 billion in GDP for each week of a government shutdown, per Politico

A looming government shutdown in the United States is set to have significant economic repercussions, with the White House estimating a loss of $15 billion in GDP for each week the shutdown persists. This estimate underscores the substantial impact such an event can have on the economy, particularly in sectors such as travel and tourism.

According to the White House, a government shutdown would not only disrupt essential services but also lead to a significant slowdown in economic activity. The tourism industry, in particular, is expected to bear the brunt of this disruption, with the U.S. Travel Association warning that the economy could lose $1 billion per week due to disruptions in air and rail travel and the closure of national parks and museums.

The economic impact of a shutdown is not confined to the tourism sector. The federal government's inability to pay its employees during a shutdown has historically led to a decline in morale and absenteeism among essential workers, such as TSA screeners and air traffic controllers. This has resulted in flight delays and longer screening lines, further exacerbating the disruption to air travel.

Moreover, the closure of national parks and monuments during past shutdowns has resulted in significant economic losses. According to the Office of Management and Budget, the 2013 government shutdown led to a loss of roughly $500 million in tourism dollars. While state funding has allowed some parks to remain open in recent years, the absence of services such as trash collection and restrooms has continued to impact local communities.

The economic strain of a shutdown is further compounded by the broader challenges facing the U.S. tourism industry. In 2025, the industry is projected to lose up to $29 billion in visitor spending due to a combination of fewer international visitors and sagging domestic travel demand. This decline in travel demand is attributed to geopolitical tensions and a bifurcated economy, where wealthier Americans maintain their travel plans while lower-income travelers pull back on spending.

The potential for a shutdown comes as Congress and the White House struggle to reach an agreement on a spending deal. Prediction markets project a 66% and 69% chance of a shutdown, respectively, highlighting the uncertainty surrounding the government's funding.

In conclusion, a government shutdown in the United States would have far-reaching economic consequences, with significant losses in GDP and substantial disruptions to essential services. The tourism industry, in particular, stands to suffer, with potential losses of $1 billion per week. As negotiations continue, stakeholders must consider the broader economic implications of a shutdown and work towards a resolution that minimizes its impact.