Shutdown bites economy, U.S. Coast Guard as Washington talks stall
Tue Jan 15 2019
Lucy Harlow (3715 articles)

Shutdown bites economy, U.S. Coast Guard as Washington talks stall

 The U.S. economy is taking a larger-than-expected hit from the partial government shutdown, White House estimates showed on Tuesday, as contractors and even the Coast Guard go without pay and talks to end the impasse seemed stalled.

The shutdown dragged into its 25th day on Tuesday with neither Trump nor Democratic congressional leaders showing signs of bending on the topic that triggered it – funding for the wall Trump promised to build along the border with Mexico.

Trump is insisting Congress shell out $ 5.7 billion for wall funding as about 800,000 federal workers go unpaid during the partial shutdown.

Trump invited a bipartisan group of members of Congress for lunch to discuss the standoff but the White House said Democrats turned down the invitation. Nine House Republicans – none of whom are involved in party leadership – attended the private lunch.

House Democratic leaders said they did not tell members to boycott Trump’s lunch but had pressed those invited to consider whether the talks would be merely a photo-op for Trump.

Separately, a bipartisan group of senators has been exploring solutions. Senator Lisa Murkowski, a Republican participant, told reporters in a Capitol hallway that the group had “momentum” but gave no other details.

Senator Joe Manchin, a Democratic member of the group, said “anything can be part of the negotiations.”

“There’s a group – everybody’s talking. Everybody wants to find a way out of this,” he said.

“Never in my political life have I ever seen the workers and the citizens that are dependent upon the services be used as a pawn,” Manchin said.

Lawmakers were supposed to be in their districts and states next week after Monday’s Martin Luther King Jr. holiday, but both the House and Senate said they planned to cancel the recess if the shutdown continues.


Homeland Security Secretary Kirstjen Nielsen said she was working with the White House and Congress to pass legislation to fund the Coast Guard. While the Pentagon is not affected by the shutdown, the Coast Guard budget is part of Nielsen’s department.

“Like the other branches of the U.S. military, active duty @USCG should be paid for their service and sacrifice to this nation,” Nielsen wrote on Twitter.

The Trump administration had initially estimated the shutdown would cost the economy 0.1 percentage point in growth every two weeks that employees were without pay.

But on Tuesday, there was an updated figure: 0.13 percentage point every week because of the impact of work left undone by 380,000 furloughed employees as well as work left aside by federal contractors, a White House official said.

The economic risk prompted hawkish Federal Reserve officials to call for the central bank to pause interest rate hikes.

The partial shutdown is the longest in U.S. history and its effects have begun to reverberate across the country.

Longer lines have formed at some airports as more security screeners fail to show up for work.

Speaking on CNBC, Delta Air Lines Inc (DAL.N) Chief Executive Officer Ed Bastian said the partial shutdown will cost the airline $ 25 million in lost revenue in January because fewer government contractors are traveling.

Food and drug inspections have been curtailed but about 400 U.S. Food and Drug Administration staffers returned to work, Commissioner Scott Gottlieb said. They focus on high-risk medical devices, drugs and food.

Trump ran for office in 2016 on a promise to build a wall to stop illegal immigration and drug trafficking. He had toyed with the prospect of declaring a national emergency to circumvent Congress to secure the funding, but this week has backed off from that idea, which would attract a court challenge.

Democrats, who took over the U.S. House of Representatives this month, have rejected the border wall but back other border security measures. They also have insisted the government be fully open before negotiations occur.

House Democrats have passed a number of bills to fund the roughly one-quarter of federal operations that have been closed, but Senate Majority Leader Mitch McConnell, a Republican, has said the chamber will not consider legislation that Trump will not sign into law.

McConnell, who has mainly stayed out of the public fray on the shutdown, on Tuesday accused Democrats of “acrobatic contortions” to avoid negotiating on the shutdown.

Lucy Harlow

Lucy Harlow

Lucy Harlow is a senior Correspondent who has been reporting about Commodities, Currencies, Bonds etc across the globe for last 10 years. She reports from New York and tracks daily movement of various indices across the Globe