WASHINGTON – The partial government shutdown could erase the entire year’s projected economic growth for the Washington region, if it continues for three weeks, an expert in the region’s economy says.
“This is an iceberg, and this is the tip that we’ve seen so far,” said Stephen Fuller, director of George Mason University’s Center for Regional Analysis.
Fuller projects the shutdown is costing the region $200 million a day and $1 billion a week. That’s a conservative estimate that includes only federal payroll, federal contractor work and the effects their spending have on the economy.
“It doesn’t include tourism, and we know that’s taken a hit. There’s enormous disruption to business generally,” said Fuller.
Praising what he calls a “large and resilient” economy, Fuller said he expects the region’s economic engine will recover quickly when federal workers get back on the job.
But he notes damage already has been done and could accumulate with contributions from a number of reasons.
Belt-tightening related to sequester cuts cost the region 26,500 jobs in August alone.
Small businesses subject to Affordable Care Act requirements may choose not to hire workers, Fuller said.
In Congress, a debt ceiling showdown is coming, and there is no federal budget yet for next year.
Fuller said there’s a lot of risk and uncertainty connected with the impact of the shutdown and the business disruptions.
“We’re going to lose a lot of jobs on this basis, especially seasonal jobs during the holiday season, so we’ll start the year much weaker than we should have,” said Fuller.