(Washington, D.C.) White House National Economic Council Director Hassett predicts that U.S. economic growth is expected to recover to 3% to 4% by the first quarter of 2026 after the federal government shutdown ends.
In an interview with CNBC on Tuesday (November 11), Hassett cited economists' estimates that the government shutdown reduced the nearly 4% economic growth of the past year by about 1 to 1.5 percentage points.
He said, "The question is when will this lost growth recover? I think some of it is lost forever, and some is not. But I estimate that by the first quarter of next year, the growth rate will be back to 3% to 4%."
Hassett also revealed that the longest federal government shutdown in history may have caused some economic data that should have been collected in October to be lost forever, making it difficult for the public to fully observe the true state of the U.S. economy during this period.
He said, "For the next few days, we will continue to grope and observe the situation in somewhat ambiguous weather until the major data agencies resume operations."
Further Reading
Democrats Lose Vote, Progressives Turn Against Senate Majority Leader Schumer
The Senate passed a temporary funding bill on Monday evening (March 10) by a vote of 60 to 40, allowing the government to resume operations until the end of January. The House of Representatives is expected to vote on the bill on Wednesday (March 12). Since a simple majority is required for House passage, the longest government shutdown in US history is expected to officially end on Friday (March 14).
However, Monday's Senate vote was only achieved because eight Democratic senators voted in favor of the bill. Democrats had insisted for over 40 days that Republicans agree to extend the expiring Affordable Care Act subsidies, but ultimately failed to achieve their goal.
Although Senate Majority Leader Schumer himself voted against the bill throughout, more progressive wing members of the party still targeted him, arguing that the Democrats' "compromise with Republicans without addressing healthcare issues is tantamount to betraying the American people."
Representative Connor of California issued a public statement saying that Schumer is no longer an effective leader and should be replaced. California Governor Gavin Newsom, a potential Democratic nominee for the 2028 presidential election, also posted on social media that the Democrats' compromise was "discouraging; this is not a deal, it's a surrender."
However, some Democratic senators pointed out that "the real culprits are President Trump and the Republican senators."
Despite facing harsh criticism from the party's left, Schumer's Senate leadership can only be decided by the 45 Democratic senators and two independent senators participating in the caucuses. Another possibility is that if the Democrats lose in next year's midterm elections, the party will nominate a new leader to replace Schumer.
A Bloomberg analysis published on Tuesday pointed out that the outcome of this Senate showdown was not entirely surprising, given the Republicans' insistence on tightening federal funding and overturning the Affordable Care Act, which was strongly supported by former President Obama.
However, while the Democrats lost this battle, they may win a larger and more important political struggle, gaining a public advantage on issues crucial to next year's midterm elections, particularly regarding healthcare costs.
Analysts point out that the Democrats won the New York City mayoral, Virginia, and New Jersey governorships last week, all focusing on affordability issues, indicating that this is a top priority for voters. Instead of venting their anger on Schumer, Democrats should relentlessly attack the Republicans on this issue.
