Virginia’s Sen. Mark Warner requests study of shutdown costs

October 25, 2013

A top Democrat from one of the hardest-hit states during the recent government shutdown has called on Congress’s investigative wing to calculate the fiscal impacts of the 16-day slowdown in federal operations.

Sen. Mark Warner (D-Va.) - Jason Reed/Reuters.
Sen. Mark Warner (D-Va.) (Jason Reed/Reuters)

Sen. Mark Warner (D-Va.), who chairs the Senate Budget Committee’s Government Performance Task Force, issued a letter to the Government Accountability Office on Thursday asking the agency to quantify how the lapse in appropriations hit the overall U.S. economy, the federal workforce, state and local governments, contractors and federal revenues.

“I heard from countless federal employees and small businesses across the Commonwealth of Virginia who faced undue hardship for no good reason due to the 16-day shutdown,” Warner said in the letter, adding that the best way to prevent another closure is to “better understand how this irresponsible action fully impacted our economy.”

President Obama’s chief economic adviser this week said the shutdown trimmed one-quarter of a percentage point from the nation’s fourth-quarter economic growth, but the administration has yet to release hard numbers on how much stopping and starting operations cost the government.

Economists and industry groups have issued a few estimates on the impacts as well. Ratings agencies Standard and Poor’s and Moody’s Analytics said the shutdown cost the economy at least $23 billion in lost economic output, while the U.S. Travel Association said the nation missed out on $2.4 billion in travel spending.

How much did the shutdown cost the economy?

The White House Office of Management and Budget said during the Clinton administration that the shutdowns of fiscal 1996 cost the government $1.4 billion, or about $2.1 billion in today’s money. Much of the impact came from paying federal employees retroactively for the time they were on furlough, according to a 1997 report from University of Maryland, Baltimore County political scientist Roy Meyers.

“I believe the costs may have been much larger this time, especially when you count lost revenues, service delays and the impact of on already fragile economy,” Warner said.

Virginia is one of four states with more than 100,000 federal employees — the others are Maryland, California and Texas. The commonwealth is also home to an untold number of firms that hold contracts with the government, which put much of their work on hold during the closure.

Federal workers will receive back pay for the time they went without wages during the shutdown, due to a provision in the deal that ended Congress’s  budgeting standstill.

Furloughed contractor employees will not receive retroactive compensation under the legislation. Many of them reported burning through vacation time to make ends meet during the closure.

To connect with Josh Hicks, follow his Twitter feed or e-mail  josh.hicks@washpost.comFor more federal news, visit The Federal Eye, The Fed Page and Post Politics. E-mail federalworker@washpost.com with news tips and other suggestions.

Josh Hicks covers the federal government and anchors the Federal Eye blog. He reported for newspapers in the Detroit and Seattle suburbs before joining the Post as a contributor to Glenn Kessler’s Fact Checker blog in 2011.
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Josh Hicks · October 25, 2013