The total cost of furloughing federal employees during the 16-day government shutdown last month was $2.5 billion, according to a report by the Office of Management and Budget (OMB).
OMB reports that “at its peak, about 850,000 individuals per day were furloughed.” This amounts to about 40 percent of the workforce, according to OMB.
The payroll cost of the furlough employees totaled about $2 billion. OMB describes this as the value of the “lost productivity of furloughed workers.” In addition, OMB identified $500 million in other compensation costs (benefits, etc.) related to the furlough.
In total, the furlough cost the government 6.6 million work days. A table in the report shows estimated furlough days by agency, from a high of 1.6 million days (roughly 25 percent of the total) to 1,000 days at the Department of State and the Department of Energy. The DoD total would have been much higher had not Congress passed the Pay Our Military Act (POMA), which enabled DOD to recall most of the 400,000 furloughed employees after the first week of the shutdown (because they were providing support for members of the Armed Forces).
The OMB report also looks at the impact of economic disruption and the programmatic costs to the government caused by the shutdown.
OMB cited numerous reports (Standard and Poor’s, Goldman Sachs, and Moody’s) that describe the negative impact of the shutdown on economic growth. The report also noted that the Council of Economic Advisors (CEA) estimates that the shutdown and the debt ceiling crisis “resulted in 120,000 fewer private-sector jobs created between October 1 and October 12.”
In addition, the OMB report listed a number of examples of economic disruption caused by the shutdown including: putting applications for import and export licenses on hold; halting 700 small business loan applications; closing national parks and the Smithsonian; putting aircraft registrations on hold; delaying the Federal Drug Administration’s (FDA) approval of medical products; devices, and drugs; and delaying the release of important statistical and economic information from the Bureau of Labor Statistics (BLS) and the Bureau of Economic Analysis (BEA).
The furloughs also had a negative effect on the government’s delivery of program and services, the report stated, OMB cited examples of programmatic impacts including: delaying almost $4 billion in tax refunds; delaying food safety inspections; halting new federal research activities; and cutting back on Center for Disease Control (CDC) flu surveillance and monitoring. In addition, OMB lists other direct budgetary impacts of the shutdown, such as lost fees from visits to parks and museums and increased interest payments on late payments.
Commenting on the report, OMB Director Sylvia Burwell said that “the report makes clear that the costs and the impact of the shutdown were significant and widespread and demonstrates why this type of self-inflicted wound should not occur again.”