Politics

House Leader Hoyer Overstated the Costs of the Government Shutdown

The Democrat from Maryland neglected to explain that the economy will regain $8 billion of the noted losses this year

Image Credit: Shutterstock & Alex Wong/Getty Images

House Majority Leader Steny Hoyer (D-Md.) may have overstated the cost of the government shutdown by not mentioning an expected bounceback, according to a report on Thursday.

President Donald Trump signed a short-term spending bill that helped reopen the government on January 25. Soon after, the Congressional Budget Office estimated that the shutdown cost the economy $11 billion.

The figure was cited by numerous outlets and some lawmakers.

But FactCheck.org said Hoyer left out a critical piece of information when citing the figure, too.

“I think you probably saw the CBO report about the cost of the shutdown,” Hoyer said Tuesday. “Eleven billion is their estimate. Those are direct costs as opposed to indirect, which I think were very substantially greater. And the real cost was the extraordinary undermining of confidence of not only federal employees, but also contractors with the government and the American people themselves.”

Related: House Dems Pass Another Bill to End Gov’t Shutdown

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FactCheck.org responded to his comments by noting he neglected to explain that the economy will regain $8 billion of those losses this year. Those projections indicate the government shutdown will only really cost $3 billion in the end.

Hoyer made similar comments a day prior as well, without mentioning the bounceback.

“The fact that the five-week Trump-McConnell shutdown directly cost our economy at least $11 billion in GDP should give President Trump and Congressional Republicans pause before they consider shutting down government again,” Hoyer said in a statement on Monday. “This shutdown harmed federal employees and their families, small businesses who lost customers, and millions of Americans who couldn’t access government services.”

The CBO figure has been used to demonstrate the severe harm such a long government shutdown could have. Lawmakers have also cited the hundreds of thousands of federal workers who have fallen behind on bills, groceries and other basic payments after missing two paychecks.

White House economic adviser Larry Kudlow, for his part, took issue with the CBO’s number of $11 billion in costs almost as soon as it was issued. “We frequently disagree with CBO, with all respect,” Kudlow said Monday at a press briefing. “They’re doing the best job they can, I get that. I won’t acknowledge any of that right now. You know, in a $20 trillion economy, it’s awfully hard to make even the best guesstimates of those kinds of small fractions of numbers.”

A spokeswoman for Majority Leader Hoyer responded to a request for comment by LifeZette by emailing a section of the CBO report. The section mentions both the initial expected losses, plus what the economy is projected to make up this year, due to the resumption in economic activity.

“As a result of reduced economic activity, CBO estimates, real (that is, inflation adjusted) gross domestic product (GDP) in the fourth quarter of 2018 was reduced by $3 billion (in 2019 dollars) in relation to what it would have been otherwise,” the report said. “(Such references are in calendar years or quarters unless this report specifies otherwise.) In the first quarter of 2019, the level of real GDP is estimated to be $8 billion lower than it would have been — an effect reflecting both the five-week partial shutdown and the resumption in economic activity once funding resumed.”

Trump’s decision to relent on his veto threat opened the door for the government to reopen. He signed a spending bill that reopened the government for another three weeks to give both sides time to negotiate a deal on border security.

The conference committee to negotiate that deal first met Wednesday.

The government shutdown began with a dispute over a proposed $5.7 billion border wall. Trump said late last year that he wouldn’t sign anymore spending bills that didn’t include the funds for the project.

Democratic leaders opposed providing any funding for the wall — which led both sides to cause the government shutdown on December 22.

Related: Trump Still Not Willing to Cave on Border Wall Amid Longest Shutdown

The government is reopened for now, but another shutdown could be right around the corner. The House and Senate formed the conference committee that is tasked with reaching a deal on border security before the next shutdown deadline of February 15. Trump gave some indications during the shutdown on what he’d would like to see in a deal.

Trump attempted to broker a deal earlier, when the shutdown was well into a record-setting month, during a speech on January 19.

He offered protections for the immigrant group known as dreamers in exchange for border wall funding. Democratic leaders quickly rejected the proposal. The dreamers are a group that were brought into the country illegally as minors.

Trump stressed the importance of having a border security wall throughout the shutdown. He argued the wall is critical to deterring illegal drugs and criminal gangs during his visit to the border on January 10.

He made similar arguments during press conferences during the shutdown as well. He even dedicated his first Oval Office address to the issue.

FactCheck.org is a project of The Annenberg Public Policy Center at the University of Pennsylvania.

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