(MENAFN- Live Mint) Treasury Secretary Scott Bessent said on Wednesday that the two-week-old federal government shutdown may cost the US economy about $15 billion a day in lost output, putting an estimate on the situation's economic toll.

He urged Democrats to“be heroes” and side with Republicans to end the shutdown, warning that it is starting to“cut into the muscle” of the US economy.

“We believe that the shutdown may start costing the US economy up to $15 billion a day,” he said in a news conference, further emphasising that the shutdown is increasingly an impediment to the otherwise sustainable wave of investment into the US economy, including in Artificial Intelligence (AI), which he believes is only getting started, Reuters reported.

Investment boom in the US

Speaking at a CNBC event held on the sidelines of the International Monetary Fund and World Bank annual meetings in Washington, Bessent credited President Donald Trump's policies for unleashing the boom in investments.

He asserted that the only thing slowing down the US economy is the government shutdown, despite strong pent-up demand. He added that incentives in the Republican tax law and Trump's tariffs would keep the investment boom going and fuel continued growth.

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“I think we can be in a period like the late 1800s when railroads came in, like the 1990s when we got the internet and office tech boom,” Bessent told Reuters.

Fiscal deficit update

Bessent also addressed the US deficit situation, claiming that the 2025 fiscal year ended 30 September was smaller than the $1.833 trillion deficit posted in the previous fiscal year, although he did not provide a specific figure.

He noted that the deficit-to-GDP ratio could fall to 3% in the coming years if the US could“grow more, spend less, and constrain spending”.

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The Treasury Department has not yet reported the annual deficit figure. The Congressional Budget Office estimated last week that the US fiscal 2025 deficit fell only slightly to $1.817 trillion despite a $118 billion jump in customs revenue from Trump's tariffs, Reuters reported.

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