The standoff between President Trump and Congress has morphed into the most expensive political feud in modern US history. Now in its second week, the government shutdown is snowballing in its economic impact.
Air travel was the first to suffer. A shortage of air traffic controllers has led to the majority of flight delays being caused not by weather or mechanical issues, but by simple understaffing in control towers. Airports from Dallas to Chicago have effectively become waiting rooms, filled with endless delay announcements. The US Travel Association estimates losses of $1 billion per week.
This week, a quarter million federal workers missed paychecks, and another 2 million are bracing for the same fate next week. A particularly sensitive deadline looms on October 15, when US military service members could miss pay for the first time in decades. It is a political flashpoint that even President Trump may find too risky to ignore.
National parks are shut down, the IRS is operating only on an emergency basis, and $8 billion in food assistance programs now rely on a $150 million reserve fund that is nearly depleted. The White House has pledged to source the funds from tariff revenues, though how that will be done remains as uncertain as the question of where payroll money will come from.
Economists estimate that each week of the shutdown reduces GDP by 0.1–0.2%. However, this time the damage is harder to measure, mainly because the flow of government data has nearly come to a halt. Mass layoffs, which the White House warned may happen soon, have not yet begun. If they do occur, the layoffs would place additional strain on already overstretched federal agencies, many of which are still grappling with Musk-inspired public sector downsizing.
