Tumblr Icon RSS Icon

How The Shutdown Hurt The Country’s Businesses

Posted on

"How The Shutdown Hurt The Country’s Businesses"

Share:

google plus icon
shutdown

CREDIT: AP Photo/Carolyn Kaster

The costs of the shutdown to the economy have been added up by various private entities. But the federal Office of Budget and Management (OMB) just released a new report that looks at all the other costs that may not factor into those analyses. In particular, the report has examples of how the shutdown impacted the country’s businesses while the government was unavailable for over two weeks:

  • The Small Business Administration couldn’t process about 700 applications worth $140 million in loans.
  • The shutdown of national parks cost communities that rely on their tourism $500 million in lost visitor spending.
  • The Alcohol and Tobacco Tax and Trade Bureau couldn’t issue export certificates for alcohol, leaving more than 2 million liters of American beer, wine, and spirits sitting in ports unable to ship.
  • Small business contracts with the Department of Defense fell by almost one-third compared to last year and spending dropped by 40 percent.
  • Aircraft purchases and deliveries were delayed by furloughs in the Federal Aviation Administration, which delayed 156 aircraft deliveries valued at $1.9 billion.
  • The Internal Revenue Service (IRS) couldn’t process an inventory of 1.2 million verification requests, potentially delaying the approval of mortgages and other loans.
  • The National Oceanic and Atmospheric Administration couldn’t apportion harvest levels, delaying the fishing season by three to four days and costing fishermen thousands of dollars in lost revenue per day.

During the shutdown, small business owners told ThinkProgress that they would take a big hit both directly from delayed contracts and indirectly from decreased consumer spending. They predicted feeling the impacts long after the shutdown ended.

The report notes other ways that the shutdown had a monetary effect. The cost of paying furloughed federal employees is about $2 billion total. The National Park Service lost out on about $7 million in revenue from fees, while the Smithsonian lost $4 million. The government will be required to pay interest on billions of dollars in payments that couldn’t be paid during the shutdown, from IRS refunds to contractor payments. Meanwhile, taxpayers will see $4 billion in refunds delayed and the start of the 2014 tax filing has been pushed back by up to two weeks, which will hurt the poor in particular.

There were also impacts that may not come with a dollar figure but will still linger. The Food and Drug Administration delayed nearly 500 food and feed inspections. Hundreds of patients were prevented from enrolling in clinical trials at the National Institutes of Health. The Environmental Protection Agency halted about 1,200 inspections of hazardous waste facilities, chemical facilities, drinking-water systems, and others. Fifty-nine airplane accident inspections were put on hold. The already large backlog of veterans’ benefits grew.

Standard & Poor’s estimated that the shutdown would shave percentage points off of GDP growth, costing the economy $24 billion, nearly the same as paying for a year of Head Start, the Children’s Health Insurance Program (CHIP), and Women Infants and Children (WIC) program combined. These other costs may be more indirect, but they will also have a big impact.

« »

By clicking and submitting a comment I acknowledge the ThinkProgress Privacy Policy and agree to the ThinkProgress Terms of Use. I understand that my comments are also being governed by Facebook, Yahoo, AOL, or Hotmail’s Terms of Use and Privacy Policies as applicable, which can be found here.