Here are two more ways a partial government shutdown could affect Americans if it continues: millions won’t get food stamps and the economy will grow at a slower pace.
With the shutdown in its 17th day, economist Joe Brusuelas of RSM takes a look at those two issues as he says it’s increasingly likely that money to sufficiently fund the Supplemental Nutrition Assistance Program, or food stamps, will run out this month. In human terms, writes Brusuelas, 20 million low-income households and 40 million individuals would lose support.
And in terms of the broader economy? Brusuelas takes the long view, arguing that if the shutdown extends to a year it would translate to losses of anywhere between .53% of gross domestic product to 1.03%.
US Government Shutdown: What happens if the shutdown lasts one year? The lack of SNAP funding alone would strip at least 0.53% from GDP alone assuming a 1.8 multiplier. That is a conservative estimate. What is your estimate of the multiplier, direct & indirect losses? pic.twitter.com/G4qDSNhq0o
— Joseph Brusuelas (@joebrusuelas) January 7, 2019
Brusuelas writes that, assuming households spend all of the benefits available to them and that they wouldn’t be able to find extra funds to pay for those food expenses, the loss of SNAP spending by households implies a direct yearly loss to GDP of nearly $61 billion.
President Donald Trump last week floated the possibility of a yearlong shutdown at the White House with congressional leaders. “I don’t think it will, but I am prepared,” he told reporters Friday.
Analysts say reopening the closed parts of the government is probably at least a week away.
Congress hasn’t allocated funding for SNAP beyond January. Last week, the Washington Post reported the program’s emergency reserves wouldn’t cover even two-thirds of February’s payments. If the shutdown continues through March, there would be no remaining money for benefits, the Post reported.