CBO Estimates 750K Employees Could Be Furloughed Daily If Govt Shuts Down

(RTTNews) - The Congressional Budget Office said on Tuesday that about 750,000 federal employees could be furloughed each day if the government shuts down.

The total cost of the compensation for furloughed employees would be about $400 million, the CBO Director Phillip Swagel said in a response letter to a query from Senator Joni Ernst regarding the possible effects of a lapse in discretionary appropriations on the pay of federal employees.

The U.S. is likely headed for a government shutdown that would begin at 12:01 a.m. on Wednesday, October 1, 2025.

The estimates are based on information from contingencies plans of various agencies and the Office of Personnel Management.

The effects of a government shutdown on the economy will depend on its extent and duration, Swagel said. "In general, a longer lapse will have larger effects than a shorter one will," the CBO chief added.

The Trump administration has indicated that it might subject some employees, who might otherwise be furloughed, to a reduction in force.

Federal employee unions - AFGE and AFGSCME, on Tuesday have jointly filed a lawsuit in a San Francisco district court against the government to prevent layoffs during a government shutdown.

The unions are asking the court to declare that Office of Management and Budget unlawfully exceeded its statutory authority in ordering the shutdown firings and to invalidate any actions agencies take pursuant to the order. "Announcing plans to fire potentially tens of thousands of federal employees simply because Congress and the administration are at odds on funding the government past the end of the fiscal year is not only illegal - it's immoral and unconscionable," AFGE National President Everett Kelley said.

The analysis in the latest CBO letter is based largely on work the agency published in 2019 after the five-week partial shutdown from December 22, 2018, until January 25, 2019, Swagel said.

During that period, discretionary spending for compensation and purchases of goods and services were delayed and some federal services were suspended. While all payments were made once the blackout was over, the CBO had estimated a total irrecoverable loss of about $3 billion or 0.02 percent of annual GDP in 2019.

The effects of a government shutdown on business activity are uncertain, and their magnitude would depend on the duration of a shutdown, the CBO said. Further, a prolonged shutdown could result in some private-sector entities never recovering all of the income they lost as a result of the suspension of federal activity.