The Stephen S. Fuller Institute

‘A huge pain’: Government shutdown idles hundreds of thousands of federal workers, contractors

Our reaction to the federal shutdown can shape the region’s future

What Does a Shutdown Mean for the Washington Region’s Economy?

During a shutdown, the federal government stops contributing to key components of the Washington region’s economy, including civilian and military wages and salaries, procurement and grants. Altogether, the federal government accounts for 29.9 percent of the regional economy and pays $2.5 billion each week for work being performed in the region. During the shutdown, a significant portion of this activity will stop. The key question, however, is how much of that lost spending and economic activity will be made up later and how much will be forgone entirely. Even if the majority of the spending is made up post-shutdown, losses in efficiency, distributional impacts, and increased uncertainty will have a modest economic costs, which will increase as the shutdown continues. Without back pay, the economic impact is projected to be significant and a three-week shutdown could cost the region upwards of 0.26 percent of its gross regional product.

The shutdown begins: D.C. stresses it remains open for business

‘It’s like the factory shut down’: for Washington region, furlough’s impact is acute