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Letter to Chairwoman of the Committee of Appropriations Barbara Mikulski - Government Shutdown Report

Letter

By:
Date:
Location: Washington, DC

The Honorable Barbara Mikulski
Chairwoman
Committee on Appropriations
United States Senate
Washington, D.C. 20510

Dear Chairwoman Mikulski:

Thank you for your letter dated October 23, 2013, requesting that the Office of
Management and Budget (OMB) produce a report detailing the impacts and associated costs of
the recent sixteen-day Government shutdown. Enclosed please find "Impacts and Costs of the
October 2013 Federal Government Shutdown," an OMB report released today examining the
economic, budgetary, and programmatic costs of the Government shutdown. These costs include
economic disruption, Federal employee furloughs, programmatic impacts, other costs to the
Federal budget, and impacts on the Federal workforce.

While the report covers a variety of areas, I want to call your attention to five key impacts
and costs. First, Federal employees were furloughed for a combine4 total of 6.6 million days.
This is more than in any previous government shutdown. Second, the shutdown cost the Federal
government billions of dollars. The payroll cost of furloughed employee salaries alone -that is,
the cost taxpayers incurred for services that could not be performed by furloughed workers - was
$2.0 billion. Beyond this, the Federal government also incurred other direct budgetary costs as a
result of the shutdown. As the report details, fees went uncollected, IRS enforcement and other
program integrity measures were halted, and the Federal government had to pay additional
interest on payments that were made late because of the shutdown. Third, the shutdown had
significant negative effects on the economy. The Council of Economic Advisers has estimated
that the combination of shutdown and debt limit brinksmanship resulted in 120,000 fewer private
sector jobs created during the first two weeks of October. Also, multiple surveys have shown
that consumer and business confidence was badly damaged. Fourth, the shutdown impacted
millions of Americans who rely on critical programs and services that stopped during the
shutdown. Fifth, as the report notes, the shutdown could have a long term impact on our ability
to attract and retain the skilled and driven workforce that the Federal government needs. The
shutdown followed an unprecedented three-year pay freeze for Federal employees, cuts in
training and support, and, for hundreds of thousands of workers, administrative furloughs earlier
this year because of sequestration. We cannot continue to treat our employees this way and
expect there will be no impact.

I hope you find the report helpful in understanding the significant consequences of the
Government shutdown. lf you have any questions, please do not hesitate to contact me or have
your staff contact Kristen J. Sarri, Associate Director for Legislative Affairs, at (202) 395-4790.
Sincerely,

Sylvia M. Btuwell
Director


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