Treasury Secretary Scott Bessent said Wednesday that the two-week-old federal government shutdown could cost the U.S. economy about $15 billion a day in lost output, an estimate of the economic toll of the situation.
He called on Democrats to “be heroes” and side with Republicans to end the shutdown, warning that it was starting to “cut into the muscle” of the US economy.
“We believe that the shutdown may start to cost the US economy up to $15 billion a day,” he told a news conference, further stressing that the shutdown is increasingly a hindrance to an otherwise sustainable wave of investment in the US economy, including artificial intelligence (AI), which he believes is only just beginning, Reuters wrote.
Investment boom in the USA
Speaking at a CNBC event on the sidelines of the International Monetary Fund and World Bank’s annual meeting in Washington, Bessent credited President Donald Trump’s policies for sparking the investment boom.
He argued that the only thing slowing the US economy is the government shutdown, despite strong pent-up demand. He added that incentives in the Republican tax bill and Trump’s tariffs will keep the investment boom going and support continued growth.
“I think we can be in a period like the late 1800s when the railroads appeared, like the 1990s when we saw the Internet and office technology boom,” Bessent told Reuters.
Fiscal deficit update
Bessent also addressed the U.S. deficit situation, arguing that fiscal year 2025, which ended Sept. 30, was smaller than the $1.833 trillion deficit reported in the previous fiscal year, though he did not give a specific number.
He noted that the deficit-to-GDP ratio could fall to 3% in the coming years if the US could “grow more, spend less and cut spending.”
The Ministry of Finance has not yet announced the amount of the annual deficit. The Congressional Budget Office estimated last week that the US fiscal year 2025 deficit fell only slightly to $1.817 trillion despite a $118 billion jump in tariff revenue from Trump’s tariffs, Reuters reported.
