The U.S. might see an economic downturn costing between $7 billion to $14 billion due to the ongoing federal government shutdown, the Congressional Budget Office (CBO) revealed in a recent report. This projection comes as the shutdown hits its four-week mark, with potential extensions posing further threats to economic stability.

This analysis was initiated at the request of House Budget Chair Jodey Arrington (R-Texas) and outlines the financial impact for durations of four weeks, six weeks, and up to two months. The CBO highlighted that while economic growth is expected to normalize by 2026, the U.S. will permanently lose up to $14 billion in real gross domestic product if the shutdown continues for another month.

Currently, the shutdown has placed approximately 750,000 federal employees on furlough, with many others working without pay. The uncertainty surrounding their ability to receive back pay once the government reopens adds another layer of distress to the situation.

According to the CBO, real GDP for the fourth quarter of 2025 could be 1 to 2 percentage points lower than it would have been if the government had remained operational. "The effects of the shutdown on the economy are uncertain and hinge on decisions made by the Administration throughout the duration of the shutdown," stated CBO Director Phillip Swagel in the report.

Further exacerbating the economic strain, the CBO reported that starting November 1, the federal government will no longer issue Supplemental Nutrition Assistance Program (SNAP) benefits. The Department of Agriculture has opted not to utilize emergency funds to sustain the food aid, a decision that has sparked legal challenges from Democratic leaders in over two dozen states.

As the shutdown drags on with no clear resolution, Senate Majority Leader John Thune expressed to POLITICO that negotiations to end the shutdown have intensified recently. Stakeholders and citizens alike await hopeful news that might bring an end to the economic bleeding and restore governmental functions and services.