Treasury Secretary Scott Bessent: U.S. GDP could take a hit from government shutdown

Government Shutdown Overview - The government is currently in a shutdown, with discussions ongoing about potential actions to resolve the situation within the next 48 hours [3] - The House has passed a clean Continuing Resolution (CR), but negotiations are stalled due to political dynamics, particularly involving Chuck Schumer and the Democratic leadership [4][5] Political Dynamics - The current negotiations are influenced by Chuck Schumer's declining poll numbers, which are affecting the Democratic party's willingness to compromise [6][21] - The Republican leadership, including President Trump and Vice President Vance, is pushing for a clean CR without additional spending increases, arguing that the economy is already growing at 3.8% and does not need further inflationary pressures [10][11] Economic Implications - There is concern that the proposed $1.5 trillion increase in spending could exacerbate inflation, which is already at its highest in decades [11] - The shutdown could negatively impact GDP growth and working Americans, with potential job layoffs and furloughs in the federal government being discussed as a consequence of the ongoing impasse [19][12] Healthcare and Subsidies - The discussion includes potential cuts to Medicaid and the impact of COVID-era subsidies, with some moderate Republicans expressing buyer's remorse regarding previous agreements [14] - President Trump's administration is focused on reducing prescription drug prices as part of broader healthcare budget reforms, which could influence future negotiations [16][17]