Workers to get $2 billion in back pay after government shutdown

WASHINGTON -- Federal workers furloughed during last month’s partial government shutdown will receive about $2 billion in back pay, the White House said Thursday.

About 850,000 federal employees were furloughed for at least part of the 16-day shutdown, leading to a loss of 6.6 million work days, the Office of Management and Budget said in a report detailing some of the costs of the fiscal standoff.

“As the president has said, the shutdown that occurred last month inflicted completely unnecessary damage on our economy and took a toll on families and businesses across the country,” OMB Director Sylvia Mathews Burwell said in a White House blog post.

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The report was the first time the Obama administration estimated the cost of back pay for furloughed workers, which OMB described as one price of lost federal productivity. Counting the cost of benefits for those workers, the price tag was about $2.5 billion, OMB said.

Congress authorized back pay for all furloughed federal workers. Furloughs peaked at about 850,000 the first week of October, Burwell said. About 400,000 civilian military workers were called back to work the following week.

The White House Council of Economic Advisors already had estimated the shutdown cost 120,000 private sector jobs and would reduce fourth-quarter economic output by 0.2 to 0.6 percentage points.

The OMB report tried to highlight some of the shutdown’s costs to the economy. Among the examples:

• The Bureau of Land Management was unable to process about 200 applications to drill on federal land.
• The National Park Service lost about $7 million in revenue because of closed parks, with surrounding communities losing about $500 million in visitor spending.
• The Internal Revenue Service delayed almost $4 billion in tax refunds.

In addition, the federal government also will have to pay an undetermined amount of money in interest on late payments to contractors and other recipients, OMB said.

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