CBO warns US shutdown shutdown could cost $400M daily, 750K employees at risk of furlough

The Congressional Budget Office (CBO) has projected that the government shutdown could cost approximately $400 million as "750,000 employees could be furloughed each day."

In a letter addressed to Senator Joni Ernst, the CBO outlined the potential impact of the government shutdown on federal employees' pay.

The CBO's analysis is grounded in its 2019 work "after the five-week partial shutdown from December 22, 2018, until January 25, 2019.

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"Using information from the agencies' contingency plans and the Office of Personnel Management (OPM), CBO estimates that under a lapse in discretionary funding for fiscal year 2026, about 750,000 employees could be furloughed each day; the total daily cost of their compensation would be roughly $400 million", the letter states.

Earlier on Tuesday, President Donald Trump announced during an Oval Office press conference, "We'll probably have a shutdown,", reports the Mirror US.

"They want to give Cadillac Medicare to illegal aliens ... at the cost to everyone else," the president claimed. This is a false assertion that Trump and other Republicans have echoed since lawmakers have failed to pass a continuing resolution to keep the government funded.

The Senate is slated to vote on the Republican and Democratic versions of a temporary funding bill at 5pm EST today. Both failed to secure the necessary 60 votes to pass the chamber before last week's congressional recess.

Government funding is due to run out Tuesday night.

Since 1980, there have been 15 instances of U.S. government shutdowns. However, these shutdowns have become lengthier since the late 90s.

While the frequency of government shutdowns has decreased, the longest one lasted for 35 days at the end of 2018 - marking the longest in history and occurring during Trump's first term.

This was one of three shutdowns that Donald Trump faced during his presidency.

The CBO letter indicated that the impact of a government shutdown on the economy would hinge on its scope and duration.

"At the time [2019], CBO estimated that although most of the real gross domestic product (GDP; real GDP is adjusted to remove the effects of inflation) that was lost during the fourth quarter of 2018 and the first quarter of 2019 eventually would be recovered, about $3 billion would never be. In its report, CBO projected that amount at 0.02 percent of annual GDP in 2019", the letter stated.