Trump’s White House admits shutdown is having far worse impact on economy than originally anticipated

President's advisers say negative impact on economic growth is nearly double the original estimates

Chris Riotta
New York
Wednesday 16 January 2019 16:39
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Donald Trump says government shutdown may be a 'blessing in disguise'

As Democrats and Republicans clash over Donald Trump’s demands for $5.7bn in funding for a southern border wall, the president's Council of Economic Advisers has acknowledged the government shutdown will have a far worse impact on economic growth than anticipated.

The agency — which advises the president on matters of economic policy — revealed in its latest analysis the shutdown could force the US economy to contract, meaning a drop in national output, along with declines in real personal income and industrial production.

The loss in economic growth will nearly double what the council had predicted in its original estimates. The shut down is currently in its 26th day.

Mr Trump has walk backed the possibility of declaring a state of emergency along the US-Mexico border — a move that could possibly provide a path for the president to receive his wall funding, but would likely face legal scrutiny — and warned earlier this month the shutdown could last “months or even years”.

Meanwhile, in an effort to alleviate the damage caused by the shutdown, the White House administration has called thousands of federal employees working at airports, food inspection facilities and the Internal Revenue Service back to work this week without pay.

Council of Economic Advisers chairman Kevin Hassett blamed the Democratic Party in an announcement revealing the agency’s latest assessment of the shutdown.

“Congress needs to look at the harms that we’re talking about,” he said on Tuesday, “and address them.”

Nearly 800,000 federal employees are currently working without pay or are furloughed across the country, causing a spike in absences at the nine agencies impacted by the shutdown.

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Whereas Mr Trump took credit for the government shutdown before it happened, telling Democratic leadership during a televised meeting, “I am proud to shut down the government for border security,” he has since shifted the blame to Democratic Party for refusing to accept his demands.

“Nancy and Cryin’ Chuck can end the Shutdown in 15 minutes. At this point it has become their, and the Democrats, fault!” the president tweeted on Monday.

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