Shutdown bites US economy as talks stall

White House estimates show the US economy is taking a larger-than-expected hit from the 25-day partial government shutdown as talks in Washington have stalled.

A closed security checkpoint at Houston airport amid the partial US government shutdown.

A closed security checkpoint at Houston airport amid the partial US government shutdown. Source: AP

The US economy is taking a larger-than-expected hit from the partial government shutdown, White House estimates showed, as contractors and even the Coast Guard go without pay and talks to end the impasse seemed stalled.

The shutdown dragged into its 25th day on Tuesday with neither Trump nor Democratic congressional leaders showing signs of bending on the topic that triggered it - funding for the wall Trump promised to build along the border with Mexico.

Trump is insisting Congress shell out $US5.7 billion for wall funding as about 800,000 federal workers go unpaid during the partial shutdown.
President Donald Trump is reportedly meeting with lawmakers to discuss the partial shutdown.
President Donald Trump is reportedly meeting with lawmakers to discuss the partial shutdown. Source: AP
Trump invited a bipartisan group of members of Congress for lunch to discuss the standoff but the White House said Democrats turned down the invitation. Nine House Republicans - none of whom are involved in party leadership - attended the private lunch.

House Democratic leaders said they did not tell members to boycott Trump's lunch but had pressed those invited to consider whether the talks would be merely a photo-op for Trump.

Separately, a bipartisan group of senators has been exploring solutions. Senator Lisa Murkowski, a Republican participant, told reporters in a Capitol hallway that the group had "momentum" but gave no other details.

Homeland Security Secretary Kirstjen Nielsen said she was working with the White House and Congress to pass legislation to fund the Coast Guard. While the Pentagon is not affected by the shutdown, the Coast Guard budget is part of Nielsen's department.

The Trump administration had initially estimated the shutdown would cost the economy 0.1 percentage point in growth every two weeks that employees were without pay.
The US federal shutdown drags into fourth week.
The US federal shutdown drags into fourth week. Source: Getty Images
But on Tuesday, there was an updated figure: 0.13 percentage point every week because of the impact of work left undone by 380,000 furloughed employees as well as work left aside by federal contractors, a White House official said.

The economic risk prompted hawkish Federal Reserve officials to call for the central bank to pause interest rate hikes.

The partial shutdown is the longest in US history and its effects have begun to reverberate across the country.

Longer lines have formed at some airports as more security screeners fail to show up for work.
A closed security checkpoint at Houston airport amid the partial US government shutdown.
A closed security checkpoint at Houston airport amid the partial US government shutdown. Source: AP
Delta Air Lines CEO Ed Bastian said the partial shutdown will cost the airline $US25 million in lost revenue in January because fewer government contractors are travelling.

Food and drug inspections have been curtailed but about 400 US Food and Drug Administration staffers returned to work, Commissioner Scott Gottlieb said. They focus on high-risk medical devices, drugs and food.


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