TERRIBLE TRAFFIC, packed Metro cars, full restaurants: Washington returned to work this week after the longest-ever government shutdown ended, at least for now. Despite vowing not to reopen government without the $5.7bn he demanded for his border wall, Donald Trump did just that, signing a spending bill that funds the government through February 15th and creates a bipartisan, bicameral commission to develop a border-security proposal.
Ann Coulter, a far-right commentator and supporter of Mr Trump, called him “the biggest wimp ever to serve as President of the United States.” A headline on the Daily Caller, a conservative website, blared “TRUMP CAVES”. Polls showed that more Americans blamed Mr Trump for the shutdown than blamed House Democrats—perhaps because, 11 days before it began, he boasted that he would be “proud to shut down the government” if Congress failed to give him exactly what he wanted.
When it was over, the non-partisan Congressional Budget Office (CBO) released a report on the shutdown’s economic effects. It estimated that American GDP was $3bn lower in the last quarter of 2018 and will be $8bn lower in the first quarter of 2019 than it would have been without the shutdown. That pain was not evenly distributed; federal workers and businesses that rely on them felt the effects more strongly than the economy as a whole. Though much of that activity should eventually be recovered, the CBO forecast that around $3bn—or 0.02% of projected annual GDP—has been permanently lost.
Businesses that could not receive permits or loans because the relevant agency was closed probably delayed hiring and investment. Unpaid workers who had to take out loans will see their future spending constrained by debt servicing. A lack of published economic data increased economic uncertainty, while funding gaps probably began “to reduce the credibility of the federal government,” making it harder to attract talent and more expensive to make contracts with private business. And though the 800,000 furloughed or unpaid federal workers will receive back wages, private-sector workers that depend on government—suppliers, contractors, restaurants near government offices and the like—may not.
Nor is America out of the woods. Mr Trump threatened to force another shutdown if the commission fails to come up with a recommendation that he likes. Bills to prevent the effects of a shutdown through “automatic continuing resolutions”—meaning that funding will continue at current levels if lawmakers fail to agree on spending levels—have been floated in both houses of Congress, by members of both parties. Mr Trump also threatened to declare a national emergency, a prospect some congressional Republicans find more appealing than another shutdown.