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The Shutdown’s Impact On The Economy: Positive Impact Of 2017 Tax Reform Eroded

According to the White House’s projections, the government shutdown that ended Friday had already eroded the positive impact of tax reform and spending increases signed by Trump in 2017.  Chairman of the Council of Economic Advisers Kevin Hassett  recently said  the shutdown reduces quarterly annualized economic growth by 0.13 percentage points for every week that it lasts. The Committee for a Responsible Federal Budget noted: “After more than four weeks, that’s the equivalent of a 0.6 percent reduction in the annualized growth rate.”

The Congressional Budget Office reports that the shutdown cost the U.S economy about $3 billion in economic activity that won’t be recovered. The Internal Revenue Service – unfunded throughout the five-week shutdown – will collect about $2 billion less in tax revenue in fiscal 2019, much of which will not be recouped.

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