Keep Factually independent
Whether you agree or disagree with our analysis, these conversations matter for democracy. We don't take money from political groups - even a $5 donation helps us keep it that way.
Fact check: What economic effects would result in 2025 if Congress reopens the government with GOP policy riders?
Executive Summary
Reopening the government in 2025 with GOP policy riders would blunt immediate economic losses from the ongoing shutdown but introduce new economic distortions tied to the riders’ content, while leaving elevated downside risks for growth, consumer confidence, and federal budget projections. The short-run GDP hit from a prolonged shutdown is measurable—roughly 0.1–0.2 percentage points of GDP per week—and reopening with riders shifts which sectors and populations feel the relief versus the pain [1] [2] [3].
1. What the competing claims actually say—and where they agree loudly
The reporting and analyses converge on a few clear claims: a multi-week shutdown is material for growth, federal workers and benefit recipients face immediate hardship, and reopening reduces short-run macro drag but can carry policy costs if accompanied by riders. Multiple pieces quantify the weekly GDP penalty at about 0.1–0.2 percentage points, drawing on CBO and private-sector modeling [1] [2] [4]. Coverage also documents mounting hardship—SNAP funding pressures, missed paychecks, and increased household stress—which amplifies the economic feedback into consumer spending and labor markets [1] [5] [6]. These consistent threads form the empirical baseline for assessing any reopening scenario.
2. The short-term macro math: GDP, Fed timing, and the cost of delay
Economic models used by the CBO and major banks place a clear short-run cost on continued closure: each week subtracts roughly 0.1–0.2 percentage points from measured GDP, and CBO historical analysis shows prior multi-week shutdowns trimmed output over adjacent quarters [4] [3]. Analysts also note that prolonged uncertainty could shift Federal Reserve expectations about policy easing, with some forecasting an earlier rate cut if the shutdown persists and activity weakens [1]. Reopening with riders restores federal outlays and payrolls, recovering a portion of lost GDP immediately, but the timing and permanence of the bounce depend on whether affected payments (like SNAP or contractor bills) are fully and promptly resumed [1] [3].
3. Who gets hit hardest—and who benefits from reopening with riders
Households relying on federal transfers and the nearly one in seven workers tied to federal pay face acute near-term vulnerability: SNAP recipients, furloughed federal staff, and contractors see income and cash-flow disruptions that depress local spending and intensify hardship [1] [6]. Reopening restores paychecks and benefits for many, easing those pressures, but GOP riders could impose tradeoffs—restrictions or policy changes that reduce real benefits or delay restorations for particular programs. That means reopening may produce a swift macro gain while simultaneously redistributing burdens across demographic groups depending on rider content [7] [5].
4. Business, permits and the invisible drag of halted government services
Beyond payrolls and transfers, shutdowns interrupt federal procurement, permitting, and loan programs that slow private-sector investment. Firms awaiting permits or federal loans face delayed projects and hiring, and federal contractors can experience cash shortages that ripple through supply chains [2]. Reopening with riders that alter regulatory rules, funding priorities, or program eligibilities can change incentives for investment—some firms gain clarity and resumed demand, others face new compliance costs or reduced program support. The net impact on business activity depends heavily on the specific riders enacted and whether they introduce persistent uncertainty in regulatory regimes [2] [8].
5. Budget arithmetic and longer-term fiscal fallout from policy riders
Analysts highlight that while reopening ends the immediate shutdown drag, policy riders can materially change budget trajectories by cutting or redirecting spending, altering revenue flows, or imposing future liabilities. CBO scenario work shows that economic conditions feed into budget outcomes—slower growth raises deficits and interest costs—so any riders that tighten or loosen policy will interact with post-shutdown macro conditions to shape deficits over the coming years [8]. Political tradeoffs are therefore economic tradeoffs: a short-term reopening victory could embed fiscal impacts that manifest in slower public investment or tighter programs later.
6. What remains uncertain and how the politics will shape the economics
Key uncertainties persist: the exact content of GOP riders, whether rescissions or programmatic changes are temporary or permanent, and how quickly back pay and benefits are implemented. Media coverage underscores growing political pressure but divergent proposals on remedies, meaning the economic outcome hinges on negotiation details more than on the mere fact of reopening [7] [5]. If riders are narrow and designed to restart payments, most short-term economic damage is reversible; if riders repurpose funding or add compliance burdens, reopening could trade immediate GDP gains for uneven distributional effects and longer-term fiscal consequences [1] [3].