Wednesday 16 January 2019

Shutdown to cost US economy $1.2bn a week, with no end in sight

People walk up the steps even though the National Archives is closed with the partial government shutdown (Alex Brandon/AP)
People walk up the steps even though the National Archives is closed with the partial government shutdown (Alex Brandon/AP)

Ben Riley Smith

The US economy will take a billion-dollar hit if the government shutdown continues until the weekend, experts have predicted as President Donald Trump showed no signs of backing down.

Some 25pc of the federal government is without funding after the US Congress and the president failed to approve a new spending package.

Standard & Poor's, the credit rating firm, estimated that the shutdown would shave $1.2billion (€1.05bn) off America's gross domestic product every week it went on.

The shutdown began last Friday. The departments of Homeland Security, Justice and Transportation are among those impacted.

Some 800,000 government workers are affected. While some of them continue to work, many will not get paid until the shutdown ends, affecting cash flows for scores of Americans.

Some have taken to social media to post about how it is affecting them with the label "#shutdownstories", including voicing concerns over substantial bills that soon need paying.

At the heart of the shutdown, which sees affected government agencies and departments close their doors, is Mr Trump's insistence on new funding for his US-Mexico border wall.

Mr Trump has said that he will not approve any new spending bill, which first needs to be agreed by the US Congress, unless it includes $5bn (€4.38bn) of border wall spending.

With the Democrats, Mr Trump's political opponents, fiercely against the move and soon to take over the House of Representatives, one of the two bodies that make up the US Congress, a deal looks tricky.

Mr Trump doubled down on his demand for border wall funding on Christmas Day when asked when government would fully reopen.

"I can't tell you when the government's going to be open. I can tell you it's not going to be open until we have a wall or fence, whatever they'd like to call it," Mr Trump said, referring to Democrats who staunchly oppose walling off the border.

"I'll call it whatever they want, but it's all the same thing," he told reporters after participating in a holiday video conference call with representatives from all five branches of the military stationed in Alaska, Bahrain, Guam and Qatar.

Mr Trump argued that drug flows and human trafficking can only be stopped by a wall. "We can't do it without a barrier. We can't do it without a wall," he said.

"The only way you're going to do it is to have a physical barrier, meaning a wall. And if you don't have that then we're just not opening the government."

Democrats have questioned the wisdom of spending money on a border wall, preferring to agree to improve fencing, technology and other border control measures.

John Deal, a Nasa contractor in Virginia, was one of those workers affected.

He said that his son's tuition fees were due in four weeks as he discussed the impact the shutdown had on his life.

"I budget ahead of time for Christmas and have saved for my son's college tuition that will be due soon," Mr Deal said.

"So the burden of the shutdown for my family is more of a concern for my family's living expense in the near future. Paying my mortgage, groceries and truck payment."(© Daily Telegraph london)

Telegraph.co.uk

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