David Lawder and Andrea Shalal
WASHINGTON (Reuters) – A two-week federal government shutdown could cost the U.S. economy as much as $15 billion a week in lost revenue, a Treasury official said late on Wednesday, correcting an earlier statement by Treasury Secretary Scott Bessent that losses could be as high as $15 billion a day.
Bessent used the misjudgment in two separate speeches earlier Wednesday, calling on Democrats to “be heroes” and side with Republicans to end it.
A Treasury spokesman said the cost estimate was based on a report from the White House Council of Economic Advisers.
Bessent said at a press conference that the quarantine is beginning to “cut the muscle” of the American economy.
A wave of investment in the US economy, including artificial intelligenceis robust and just getting started, but the federal government shutdown is becoming a growing obstacle, Bessent said.
“There was pent-up demand, but then President (Donald) Trump unleashed that boom with his policies,” Bessent told a CNBC event on the sidelines of the International Monetary Fund and World Bank annual meetings in Washington.
“The only thing slowing us down here is the government shutdown,” Bessent said.
He said breaks in the Republican tax law and Trump tariffs will help continue the investment boom and spur further growth.
“I think we may end up in a period like the late 1800s when the railroads came in, or the 1990s when we had the Internet and office technology boom,” Bessent said.
US DEFICIT HAS REDUCED, BESSENTE SAYS
Bessent also said the U.S. deficit in fiscal 2025, which ended Sept. 30, was smaller than the $1.833 trillion deficit recorded in the previous fiscal year. He didn't give a figure but said the deficit-to-GDP ratio could drop to 3% in coming years.
The Treasury Department has not yet reported the annual deficit figure.
The Congressional Budget Office estimated last week that the U.S. deficit for fiscal year 2025 fell only slightly to $1.817 trillion, despite a $118 billion jump in customs revenue due to Trump's tariffs.
“The deficit-to-GDP ratio, which is an important number, now has a five,” Bessent said at a CNBC event.
Asked if he wanted to see a three at the top of the deficit-to-GDP ratio, Bessent replied: “Yes, that's still possible.”
He added that the ratio would decline if the U.S. could “grow more, spend less and limit spending.”
(Reporting by David Lowder and Andrea Shalal; Writing by Dan Burns and David Lowder; Editing by Andrea Ricci and Christopher Cushing)
