Government shutdown will not have a 'long-run' effect on GDP growth: Kevin Hassett

By U.S. EconomyFOXBusiness

Kevin Hassett: Partial government shutdown will not have a ‘long-run’ effect on GDP growth

White House Council of Economic Advisers Chairman Kevin Hassett discusses how the partial government shutdown is affecting government workers and why the shutdown will not hurt GDP growth in the long-run.

Kevin Hassett, the White House’s chief economic adviser, suggested on Tuesday that the ongoing partial government shutdown should not negatively affect the long-run growth of the U.S. economy.

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“In the fullness of time, this should not have a long run effect on GDP growth,” Hassett said during an interview with FOX Business’ Melissa Francis. “It’s something that is going to be very painful this quarter.”

The government shutdown is in its fourth week affecting nearly 800,000 federal workers who have been furloughed or forced to work without pay.

“I think they’ve been promised that they’re going to get to get the back pay, which doesn’t really help them right now when they’re trying to pay the bills,” Hassett said. “But in the fullness of time when they get the back pay, then that means that they’ll be a rebound in government spending.”

The Trump administration is urging the Democrats to return to the negotiating table after rejecting the president’s lunch invitation to discuss border security.

“You know the fact is that the president and the team, they made an offer, a good offer, and a reasonable offer,” Hassett said. “They have not received a counter offer. They tried to set up a lunch. The Democrats wouldn’t show up to lunch.”

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Hassett said he expect the economy to return to 3 percent growth once the shutdown is resolve and federal workers return to work.

“The government workers that aren’t getting paid are feeling the pain and it’s going to really affect the economy as well,” he said.