Bessent: Government Shutdown Costs U.S. Economy $15 Billion Daily/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. Treasury Secretary Scott Bessent warns the ongoing government shutdown is costing the U.S. economy up to $15 billion daily. Speaking during IMF/World Bank meetings, he urged Democrats to support reopening the government. Bessent also reported signs of economic strength driven by investment and shrinking deficits.
Shutdown’s Economic Impact Quick Looks
- Treasury: Shutdown costing U.S. economy $15 billion per day
- Bessent warns shutdown “cutting into muscle” of recovery
- Trump’s economic policies credited for tech-driven boom
- Republican tax law and tariffs boosting revenue and growth
- Bessent calls on Democrats to help end shutdown
- U.S. deficit reportedly shrank in fiscal year 2025
- Deficit-to-GDP ratio trending downward, says Treasury chief
- Shutdown seen as only major obstacle to sustained growth
- Boom compared to 1990s tech surge and 1800s rail era
- Investment in AI and infrastructure remains robust despite gridlock
Deep Look: Bessent Warns Shutdown Bleeding $15 Billion Daily from U.S. Economy
WASHINGTON — Oct. 15, 2025
As the government shutdown enters its third week, U.S. Treasury Secretary Scott Bessent sounded the alarm on its growing economic toll, estimating a daily cost of $15 billion in lost output to the U.S. economy. He delivered the warning on the sidelines of the IMF and World Bank annual meetings in Washington, D.C., on Wednesday.
“The shutdown is now cutting into the muscle of the U.S. economy,” Bessent said, urging lawmakers to end the standoff. “We are in a historic investment boom — the only thing slowing it down is this shutdown.”
Shutdown Threatens Strong Economic Momentum
Bessent attributed the current investment wave to Trump-era economic policies, including tariffs and incentives embedded in Republican tax law, which he said are continuing to fuel capital growth, especially in artificial intelligence, energy, and infrastructure.
“There is pent-up demand, and President Trump has unleashed this boom with his policies,” Bessent told attendees during a CNBC panel discussion at the IMF summit. “We believe we’re on the cusp of a transformative economic era — think the late 1800s railroads, or the internet boom of the 1990s.”
But that momentum, he warned, is increasingly at risk due to the federal government shutdown, now in its 15th day. He urged Democrats to ‘be heroes’ and join Republicans in passing legislation to reopen the government.
Fiscal Health: Deficit Falls, Outlook Improving
Bessent also reported that the U.S. federal deficit shrank in fiscal year 2025, which ended on September 30. Although he did not release a specific figure, he noted that the deficit-to-GDP ratio has improved and now starts with “a five,” indicating progress toward fiscal sustainability.
“We could even get that number into the threes,” Bessent said. “We just need to grow more, spend less, and constrain overall spending.”
While the Treasury Department has not yet officially released the full 2025 deficit figure, preliminary data from the Congressional Budget Office estimated it to be $1.817 trillion, a slight improvement from $1.833 trillion in 2024. A $118 billion surge in customs revenue — driven by Trump’s renewed tariff policies — played a key role in the decline.
Bessent emphasized that while large, the deficit must be viewed relative to economic output. “The deficit-to-GDP is what matters most,” he said. “And we’re improving that metric.”
Investment Boom: AI, Infrastructure, and Resilience
Bessent highlighted a nationwide investment surge, particularly in technology, AI, semiconductors, and domestic manufacturing, noting that much of the growth is private-sector led and policy-enabled.
“This is not a short-term stimulus bubble,” he explained. “This is sustainable investment that is only accelerating.”
He added that infrastructure spending, driven by the America Rebuilds Act and new defense contracts, remains largely unaffected for now, but prolonged gridlock could eventually slow hiring, procurement, and development.
Partisan Gridlock: Political Pressures Mount
The shutdown — sparked by a clash between Republicans and Democrats over health care subsidies and fiscal priorities — is beginning to ripple across sectors. Analysts warn that if not resolved soon, it could harm the U.S.’s global economic reputation, especially as international partners gather at the IMF and World Bank events.
While Republicans continue to demand spending reforms, Democrats have pushed back, especially on proposed cuts to Medicaid and renewable energy programs. Bessent, however, emphasized that economic pain doesn’t fall along partisan lines.
“Every day we delay, businesses lose confidence, workers lose income, and America loses time.”
Despite the political divide, Bessent said there’s still optimism on Wall Street and in key industries, so long as the shutdown ends quickly.
You must Register or Login to post a comment.