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Government shutdown could lead to $14B in lost GDP, CBO reports

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The ongoing federal shutdown could cost the U.S. economy between $7 billion and $14 billion, according to a new report from the nonpartisan Congressional Budget Office.

The report, prepared in response to a request from House Budget Chair Jodey Arrington (R-Texas), estimated the economic impact of the shutdown if it lasts four weeks — a mark hit Wednesday — six weeks, or two months.

Under all three scenarios, the CBO expects economic growth to be back on track after 2026, but some of the real gross domestic product loss resulting from furloughs of federal workers will not be recovered. That permanent loss could be anywhere from $7 billion, if the shutdown were to end now, and $14 billion, if it were to drag on for an additional month.

The Trump administration has placed about 750,000 federal workers on furlough, and many more are currently working without pay, although their ability to claim back pay after the government reopens — a standard precedent under previous government shutdowns — appears uncertain.

The CBO also anticipates that real GDP will be anywhere from 1 to 2 percentage points lower in the fourth quarter of 2025 than it would have been if the government remained open.

“The effects of the shutdown on the economy are uncertain. Those effects depend on decisions made by the Administration throughout the shutdown,” CBO Director Phillip Swagel wrote in the report.

The economic impacts of the shutdown will also be exacerbated when the federal government ceases disbursements of Supplemental Nutrition Assistance Program benefits beginning Nov. 1, per the CBO.

The Department of Agriculture, which administers the program in partnership with states, has decided not to tap emergency funds to keep food aid flowing amid the shutdown — a move being challenged by Democratic leaders of more than two dozen states.

While a resolution to reopen the government remains elusive, Senate Majority Leader John Thune told POLITICO on Wednesday that talks to end the shutdown have “picked up.”

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Congress

Democrats send new DHS funding offer

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Senate Minority Leader Chuck Schumer said Democrats have submitted their latest proposal for pairing Department of Homeland Security funding with immigration enforcement policy changes.

“Democrats sent Republicans our counteroffer on legislation to reopen DHS, pay TSA workers, while at the same time rein in ICE with commonsense guardrails,” Schumer said, adding that the offer “contains some of the very same asks Democrats have been talking about now for months” on changes to immigration enforcement tactics.

Schumer met with House Minority Leader Hakeem Jeffries Wednesday to discuss the funding stalemate.

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Trump demands ‘clean 18-month extension’ of key spy powers

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President Donald Trump called on Congress Wednesday to quickly extend a key surveillance program amid a Republican rebellion that is threatening to tank the effort ahead of an April 20 deadline.

“When used properly, [the program] is an effective tool to keep Americans safe,” Trump said in a Truth Social post Wednesday. “For these reasons, I have called for a clean 18-month extension.”

He emphasized that restrictions included in the last reauthorization of the Section 702 spy program should remain in place. Trump also argued that the ongoing war against Iran should lead Congress to act quickly given the program, which allows intelligence agencies to monitor communications abroad without a warrant, is “extremely important to our Military.”

“With the ongoing successful Military activities against the Terrorist Iranian Regime, it is more important than ever that we remain vigilant, PROTECT our Homeland, Troops, and Diplomats stationed abroad, and maintain our ability to quickly stop bad actors seeking to cause harm to our People and our Country,” Trump said.

Blue Light News previously reported that the White House had privately communicated Trump’s support for a straight extension to key congressional leaders.

Speaker Mike Johnson pushed House Republican hard-liners who want new restrictions against domestic surveillance to back the extension Trump wants, including in a closed-door House GOP meeting Wednesday morning. Several Republicans still raised concerns about the “clean” reauthorization plan, including Rep. Andrew Clyde of Georgia.

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Biden-era DOJ memo: Trump hoarded classified documents relevant his businesses

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President Donald Trump maintained government documents relevant to his business interests after he left office, according to an internal memo from former special counsel Jack Smith’s office.

The memo, viewed by Blue Light News, was transmitted by the Justice Department to the House and Senate Judiciary Committees earlier this month. It was turned over in response to Republican-led probes into the investigations Smith led during the Biden administration surrounding Trump’s alleged mishandling of classified documents after leaving office, as well as his efforts to subvert the results of the 2020 election.

“Process is very much ongoing but the FBI has already since found both — that classified documents were commingled with documents created after Trump left office and that there are classified documents that would be pertinent to certain business interests,” stated the memo, dated Jan. 13, 2023.

The second volume of Smith’s report on his team’s investigative findings, which centers around the classified documents case, is currently under a court-ordered seal. Democrats have been pushing for DOJ to release it in hopes that it could reveal damaging information about the president. New information about Trump’s conduct, unearthed in this memo, could only heighten the pressure on the administration to make the full report public.

It also could inform questions from members of the Senate Judiciary Committee, which is due to invite Smith to testify in a public hearing on his Trump investigations in the coming months.

Rep. Jamie Raskin of Maryland, the top Democrat on the House Judiciary Committee, alleged in a new letter to Attorney General Pam Bondi dated Tuesday that the memo suggests Trump “may have sold out our national security to enrich himself.”

Raskin also alleged that the DOJ appeared to have violated the judicial order compelling the seal of the second volume of Smith’s report in handing over some materials to Congress, including grand jury material.

A Justice Department spokesperson, in a statement Wednesday, rejected Raskin’s claims and called his move a “political stunt.”

The spokesperson said that it was unsurprising that Smith’s “files contain salacious and untrue claims about President Trump,” and the files handed over to Congress did not violate the court order, nor did they disclose relevant grand jury material.

“We understand that Jamie Raskin, much like Jack Smith, is blinded by hatred of President Trump,” the spokesperson wrote. “However, he needs to get his facts straight — this Department of Justice is the most transparent in history in part because of our efforts to expose the weaponization of the Biden administration in full compliance with the law and the court.”

Abigail Jackson, a White House spokesperson, also in a statement maintained that Trump “did nothing wrong” and called Raskin’s actions “pathetic.”

A spokesperson for House Judiciary Democrats pointed to the irony in the Trump administration claiming to be “the most transparent in history” when it was refusing to release Smith’s findings.

“Another day, another manufactured outrage from the left,” a spokesperson for House Judiciary Republicans countered.

The 2023 memo transmitted to Congress also stated that Trump maintained documents that were so sensitive that only few had access to them beyond the president, and the fact that he had materials relevant to his business interests suggested “a motive for retaining them.”

“These new disclosures suggest that Donald Trump stole documents so sensitive that only six people in the entire U.S. government had access to them,” Raskin wrote in his letter to Bondi. “It is time for you to stop the cover-up and allow the American people to know what secrets he betrayed and how he may have cashed in on them.”

Gregory Svirnovskiy contributed to this report.

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