The Government Shutdown Is Nearing an End but Comes With a Multibillion-Dollar Price Tag

The Senate bill to reopen the federal government is headed to the House for a final vote, bringing an end of the longest shutdown in U.S. history closer—as the economic toll from the disruption continues to mount. 

The length of time it takes the Republican-controlled Congress to pass the funding package could cost the economy billions of dollars.

The Congressional Budget Office, a nonpartisan federal agency that provides economic information to Congress, estimates that the shutdown would result in $11 billion in economic losses if it ends at the six-week mark, which falls on Wednesday.

If the shutdown stretches for another two weeks, the economic cost will climb to $14 billion, according to CBD's projections.

What happened in the Senate?

A group of seven centrist Senate Democrats and one Independent broke ranks with their caucus and joined Republicans Sunday night in a 60-40 vote to adopt a legislative measure aimed at ending the weekslong stalemate over the extension of health care tax credits benefitting millions of Americans.

The move sowed division among the Democrats, with progressive lawmakers and party leaders alike rebuking their colleagues for going along with the Republicans' plan without extracting any major concessions on the hot-button issue of Affordable Care Act subsidies, which are set to expire Dec. 31.

Members of the House, which have been on recess since September, are now on their way back to Washington, DC, to vote on the funding bill, which has received President Donald Trump’s seal of approval. 

If adopted, the plan will fund a handful of federal agencies, including the Department of Agriculture and the Department of Veterans Affairs, for the rest of the fiscal year ending next fall. Most agencies and programs, however, will be funded only through Jan. 30, 2026.

The House plans to hold the vote as early as 4 p.m. ET on Wednesday, before it lands on Trump's desk for signing, reported CNN.

On Tuesday, the president congratulated Senate Majority Leader John Thune and House Speaker Mike Johnson on what he called a "very big victory."

Speaking during a Veterans Day commemoration ceremony at Arlington National Cemetery, Trump expressed optimism that the shutdown’s days were numbered, saying: "We’re opening up our country."

Furloughs' economic toll

Late last month, CBO released a letter projecting that the nation's gross domestic product (GDP) for the fourth quarter of 2025 will be reduced by 1 to 2 percentage points as a result of the shutdown, depending on how long it ultimately lasts.

While most of the losses in growth are expected to be "recovered eventually" once the government reopens and spending picks up, between $7 billion and $14 billion will be permanently lost, according to the agency.   

At least 670,000 federal workers are currently furloughed and about 730,000 are working without a paycheck, likely cutting down on spending due to the economic uncertainty, said the Bipartisan Policy Center, a DC-based think tank. 

CBO warned that the reduction in hours worked by furloughed federal employees would result in a cumulative loss of real GDP of up to $14 billion by the end of 2026 because the workers' lost productivity cannot be recouped over time.  

Under the measure passed by the Senate on Sunday, furloughed workers will receive back pay, contrary to the president's previous remarks threatening to withhold the funds.

"Even with back pay, the shutdown inflicts a financial shock," says Realtor.com® Senior Economist Anthony Smith. "Households that dipped into savings or accrued debt will hold back on major purchases, like buying a home, until they can rebuild their emergency funds."

SNAP benefits

The shutdown suspended the funding of the Supplemental Nutrition Assistance Program (SNAP), commonly known as food stamps, which roughly 42 million low-income Americans across the U.S. rely on each month.

The issue has emerged as a political lightning rod, fueling a clash between the Trump Administration and several states that managed to provide full benefits to SNAP recipients for the month of November. 

The matter is currently making its way through the courts. 

The Senate bill includes a provision to fully fund the SNAP program through next September, which promises to boost economic activity among people receiving food assistance.  

Small businesses

Thousands of small businesses across the U.S. rely on government loans to make ends meet.

Since the start of the crisis, more than 8,300 small employers have been denied access to $170 million in loans from the Small Business Administration. 

According to the agency, that has resulted in a cumulative loss of $4.5 billion in capital since Oct. 1. 

Federal contractors

The federal government employs through third parties millions of contractors who provide a wide range of support services across its agencies.

The shutdown has left more than 5 million contract workers without employment, to the tune of about $800 million, according to an estimate from Oxford Economics, an investment advisory firm, as CBS News reported.

"They aren't guaranteed back pay, their permanent loss of income creates a lasting drag on local economies, particularly in major government hubs," says Smith.

Travel disruptions

The 40-plus day impasse in Washington has hit the travel industry especially hard, as the Federal Aviation Administration (FAA) ordered airlines to cancel thousands of flights beginning on Friday.  

The measure was adopted to ease the burden on the increasingly overworked and frustrated air traffic controllers, who have started quitting their jobs or retiring after missing two consecutive paychecks.

Scrapped flights translate into fewer tourist dollars going to hotels, restaurants, transportation servies, and entertainment venues in cities across the U.S.  

Tourism Economics, a consulting firm, estimated that the shutdown would shrink travel spending by $63 million a day, amounting to a $2.6 billion loss over six weeks. 

Housing market

The shutdown has disrupted a wide array of programs and services that many homebuyers and homeowners depend on, resulting in stalled closings and a reduction in sales activity.

The suspension of the National Flood Insurance Program (NFIP) was the most immediate threat to closings, according to Smith. It effectively froze thousands of home sales in flood-prone areas, hampering at least 1,300 property transactions per day.

For rural homebuyers, the USDA loan program’s total suspension halted new lending entirely. Reopening will trigger a severe backlog as the agency struggles to process weeks of pent-up demand for these critical zero-down-payment mortgages.

"The end of the shutdown doesn’t mean an instant return to normalcy," warns Smith. "Agencies such as the Federal Housing Authority (FHA), USDA, and NFIP will face massive backlogs, and there may be delays in transactions as these are processed."

The economist also predicts that local economies with high concentrations of federal workers, such as DC; Virginia Beach, VA; and Oklahoma City, OK, will likely experience a lag in housing recovery.

"Uncertainty over income caused many buyers to pull back, and that caution won't vanish overnight," adds Smith.