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Democrats seek shutdown leverage with economy over Trump, GOP

11 7
03.10.2025

Lawmakers on Capitol Hill are buckling in for a protracted government shutdown, something that experts say could begin to have a significant impact on the economy and put pressure on President Trump to negotiate a deal with Democrats.

Economic experts say the shutdown won’t have an immediate impact on the economy, but they predict the effect on gross domestic product (GDP) will add up after a few weeks and could become more pronounced because of other economic headwinds, such as the uncertainty created by Trump’s global trade war.

“If the shutdown is a week or two that is no big deal, it’s not going to have much of a macroeconomic impact. … If it lasts a month, six weeks, then that becomes a big deal. Government services are disrupted, the fact that government workers aren’t being paid, starts to do damage,” said Mark Zandi, the chief economist at Moody’s Analytics.

“It also has some impact on financial markets. Global investors would wonder about the governance of the nation and what it all means for paying off the debt in a timely way, but it would have to be a month or longer before that damage is significant to be the forcing mechanism,” he said.

It’s unclear, of course, whether Democrats will feel the most pressure to deal, or if it will be Republicans and Trump.

So far, neither side appears to be that worried about taking heat.

Zandi said the “forcing mechanism” most likely to put pressure on Congress and Trump to make a deal will come on Oct. 15, when members of the military would miss their first paycheck during the shutdown.

About 2.8 million people work for the U.S. military, including 1.3 million active duty troops.

“I’d be surprised if the shutdown extended beyond that, at least to any significant degree, because then our soldiers aren’t being paid, and I think that would be tough politically,” Zandi said.

Both Democrats and Republicans think they have strong public arguments to make that the other side is more to blame for the shutdown.

Republicans point to the fact that the GOP-controlled House passed a “clean” funding bill that would extend existing spending through Nov. 21. They accuse Democrats of voting for the shutdown.

Democrats have argued that health care premiums will rise this fall because Congress has not extended enhanced........

© The Hill