The effects of the 35-day shutdown are still being felt across America. Picture: AP/ Evan Vucci
The effects of the 35-day shutdown are still being felt across America. Picture: AP/ Evan Vucci

America broken by $11b mistake

THE government shutdown has cost the United States economy $US11 billion ($A15 billion), put lives at risk, delayed vital projects and left tens of thousands of contract workers broke.

Workers who are not eligible for backpay after Donald Trump reopened the government are desperately afraid of what comes next.

Contractors in government departments and agencies said they were a month behind on essential duties and looking for new jobs outside the public sector.

"I honestly don't think I can survive another shutdown," Julie Burr, from Kansas City, Missouri, told news.com.au. "I'm afraid it is likely. I'm currently looking for other employment."

Ms Burr, a 49-year-old single mother who missed a month's pay during the shutdown, said it was "awful" to sit in a meeting and hear permanent staff promised backpay. She turned to crowd-funding website GoFundMe to cover her January and February rent and bills.

Donald Trump has temporarily reopened the government, but federal contractors will not see any backpay. Picture: AP/Evan Vucci
Donald Trump has temporarily reopened the government, but federal contractors will not see any backpay. Picture: AP/Evan Vucci

"I wouldn't have made it through this without that help," she said. "Emotionally, it has been very stressful on me and my children. The not knowing was awful."

Marilyn Chin, from New York, told news.com.au the temporary reopening of the government was "like a weight lifted off my shoulders" after the 62-year-old was forced to turn to food banks for the first time in her life. But said she was hoping there would not be another closure in three weeks.

Angela Dixon, a 45-year-old prison teacher from Miami, said it was "a load off", but: "We are preparing for a repeat."

The record 35-day partial government shutdown has had many lasting effects and assessing the damage has just begun.

The National Transportation Safety Board was unable to dispatch investigators to 22 accidents that killed 32 people, jeopardising evidence and potentially preventing them from determining the cause. It was also unable to evaluate a further six crashes and 69 aviation cases.

 

Economists say the shutdown wiped $US11 billion off the US gross domestic product. Picture: AP/Jacquelyn Martin
Economists say the shutdown wiped $US11 billion off the US gross domestic product. Picture: AP/Jacquelyn Martin

 

Many low-paid federal workers have spent their emergency savings and are facing eviction, power shut-offs, hunger and even going without lifesaving medications, the Washington Post reported. National parks need to clear thousands of tons of snow, clean up bathrooms, clear rubbish and fix damage. Government departments are dealing with millions of unanswered letters and housing agencies scrambling to get homeless families into accommodation.

Potential safety issues remain after food and drug inspection services were placed on hold. Manufacturing companies and government suppliers have cut their schedule or closed down completely.

Mr Trump has threatened to renew the shutdown if no agreement on border wall funding is reached by February 15, or to declare a national emergency, which he says would allow him to use funds from other budgets to start construction.

Consumer confidence in the US tumbled this month to its lowest in a year-and-a-half thanks to the shutdown and uncertain financial markets.

The economy had already been showing signs of slowing and the shutdown is set to distort reports and hamper a data-dependent Federal Reserve, Dow Jones warned.

 

House Speaker Nancy Pelosi has said Democrats will not fund Mr Trump’s $US5.7 billion border wall. Picture: AP/Andrew Harnik
House Speaker Nancy Pelosi has said Democrats will not fund Mr Trump’s $US5.7 billion border wall. Picture: AP/Andrew Harnik

 

The Congressional Budget Office said delayed pay cheques, reduced working hours and stalled contracts had led to a loss of about $US11 billion ($A15 billion) in gross domestic product over the five-week shutdown.

It said about $US8 billion ($A11 billion) of that would be recovered as workers returned, but $US3 billion ($A4 billion) or 0.02 per cent of GDP in 2019 had been permanently erased.

The US economy remains healthy and unemployment close to its lowest level in decades at 3.9 per cent, but investors are concerned, with global growth sputtering and the Federal Reserve gradually raising interest rates.

A government report issued on Monday predicted US economic growth would slow as the effects of Mr Trump's tax cuts for businesses begin to drop off. The Congressional Budget Office report sees the economy growing by 2.3 per cent this year, a marked slowdown from 3.1 per cent in 2018.

The trade war between the US and China - the world's two biggest economies - also threatens to disrupt global commerce. On Monday, the Trump administration unveiled criminal charges against the Chinese tech giant Huawei, complicating high-level talks due to start on Wednesday in Washington intended to defuse the trade war.

Ordinary workers can only watch and hope Mr Trump's committee of 17 bipartisan politicians can come to an agreement over his wall.

Polls show most Americans do not support the idea.


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