White House Officials Warn of Severe Economic Impact from Shutdown

Top White House economic officials have issued dire warnings regarding the severe economic impact of the ongoing federal government shutdown, indicating that it could lead to a negative quarter for the U.S. economy. According to White House economic adviser Kevin Hassett, this situation has the potential to halve economic growth.

In an interview broadcast on CBS's Face the Nation, Hassett highlighted the staffing shortages among air traffic controllers as a major factor causing significant travel delays ahead of the Thanksgiving holiday. He emphasized that this time of year is crucial for the economy.

"Thanksgiving is one of the busiest periods of the year for the economy, and if travel is impeded during that time, we may face dire consequences for the fourth quarter performance," Hassett pointed out.

Treasury Secretary Scott Bessent also expressed concerns on Sunday, stating that the prolonged government shutdown could result in a growth decline of as much as half this quarter if the impasse persists. He remarked that the economic impact has worsened significantly since the shutdown began.

"From day one, the government shutdown has affected the economy, but the situation is deteriorating further," Bessent said during an interview on ABC's This Week.

With the shutdown now in its 40th day, numerous federal workers have been sidelined, leading to disruptions in essential services including food aid and travel. The ongoing staffing shortages in air traffic control are particularly troubling as the busy Thanksgiving season approaches.

As air travel comes under pressure, U.S. flights are anticipated to slow considerably. On one recent Sunday alone, more than 2,000 flights were canceled, and over 8,000 experienced delays according to FlightAware data.

In an effort to mitigate these challenges, both the U.S. Department of Transportation and the Federal Aviation Administration announced a 10-percent capacity reduction at 40 major airports across the country, effective Friday. This strategy aims to alleviate staffing pressures and lessen risks to airspace safety.

"It's only going to get worse as we approach Thanksgiving," said Transportation Secretary Sean Duffy in an appearance on CNN. "In the two weeks leading up to the holiday, we will likely see air travel reduced to a trickle."

Airlines for America, representing major carriers, reported that staffing problems linked to the shutdown have negatively impacted the travel plans of over 4 million passengers since the shutdown began on October 1.

Estimates indicate that the daily economic impact of the shutdown on the U.S. economy ranges from $285 million to $580 million. During this shutdown, it has been required that 13,000 air traffic controllers and 50,000 security screeners work without receiving pay.