shutdown relief at last.
But what's been the cost?
Without the government shutdown, the US economy would have probably grown close to 2%.
Now we're going to grow close to 1%.
I haven't been able to buy groceries since the end of September.
My landlord is still waiting for rent.
I have a car payment that's becoming more and more due as well as all the other of my bills.
Welcome to World Business Report from the BBC World Service.
I'm Sam Fenwick.
As the end of the United States' longest ever shutdown edges closer, we'll look at the cost for workers and the impact on the wider economy.
And it's usually a time for world leaders to come together to discuss the climate.
But this year's COP summit is missing some major players.
So there are some signs of relief for US government workers who haven't been paid during the shutdown.
Over the weekend, senators took the first step towards ending the longest federal shutdown in US history, with eight Democrats voting to advance a plan to reopen government.
And now the White House has signalled its support for the bipartisan deal.
Earlier, I spoke to William.
He's a firefighter in Washington state because I wanted to understand what this shutdown has meant for him and his family.
It's been absolutely god-awful.
We're grossly underpaid as federal firefighters and we didn't expect the last paycheck.
We would get to have 48 hours of leave without pay.
I normally get paid about 1600 every two weeks and my last paycheck was about 600 in the first half of October.
So that was your last paycheck?
Correct.
Beginning of October, $600.
Yep.
Now you're a single dad, aren't you?
Yeah, father of three.
You were a father of three.
You've got to keep three kids and yourself.
How difficult has that been?
It's been impossible.
I haven't been able to buy groceries since the end of September.
My landlord is still waiting for rent.
I have a car payment that's becoming more and more due as well as all the other of my bills.
I mean, all of us in federal service, not just firefighters, we're all feeling that.
And I've been feeling it especially.
So what are you doing?
Putting on the credit card, your grocery bills?
No, I've been living off of my parents.
My mother is retired and lives on social security.
And my dad is almost retired and is still working.
But I've been eating from their credit cards.
That's really tough, isn't it?
It's horrific.
And so what about your rent?
Your landlord sounds like they're being helpful for the time being.
They're being amicable.
Yeah, for now, yes.
The way it's worked for me is I only owe rent for November, so I'm not really behind, but I'm still behind as far as that's concerned.
But so far, yeah, he's been amicable.
I suppose you know the money is going to come at some point.
It's going to come in.
Your pay is going to get paid at some point.
But you sound anxious.
It's the anxiety of not knowing when.
You know the way this administration's been working, like we don't trust that we're going to get paid.
I mean it is under federal law that you know all exempted and furloughed employees during a shutdown have to be paid.
But this administration's been rescinding funds for laws that they've passed.
So there is no guarantee.
We're all here on an IOU hoping that it'll get cashed.
So how do you feel at the moment?
Then you know these eight Democrats who are kind of trying to push it over the line.
Do you feel like there's some light at the end of the tunnel?
Honestly...
Personally, I feel what the hell was the point if you're just going to cave like that?
Why did I?
You know, countless millions of federal employees have to suffer if you were just going to turn around in 40 days?
Like, what the hell was the point?
That to me was what I felt this morning.
Presumably you've been going into work.
Oh, yes.
We're mandatory reporters.
I have to show up for work whether I get paid or not.
And what's morale like around the station?
Bad, really bad, very depressing.
We were a pretty go-getter department proactive, we did a lot of training, we take pride in the work we do and all of that just stopped.
You know, if i were to get hurt on the job, there would have been no medical services available to me because they've been furloughed, you know.
So it's like we can't do anything but the bare minimum and it hurts.
Like we're the biggest fire department in the world because we're on every single military base the us has around the world and none of us have been getting paid.
All of us have been feeling this exponentially.
William there, a firefighter from Washington state.
So what happens next?
Here's Speaker Mike Johnson calling for House lawmakers to be on standby to vote.
The Senate is moving forward on an amended House CR, a continuing resolution that will reopen the government until January 30th.
The Senate will be back in session this morning to finish their job, and we're certainly praying that they do.
They'll need unanimous consent from all senators to fast-track their final vote.
As you know, there are some procedural hurdles that one or more could throw in the way, but we certainly hope that they won't do that, because so many people across this country are desperate for the government to reopen.
At the very moment that they do that final vote.
I will call all House members to return to Washington as quickly as possible.
We'll give a 36-hour formal and official notice so that we can vote as soon as possible to pass the amended CR bill and get it to the president's desk.
So what happens when it hits the president's desk?
How long might it take before people like William will get paid?
Let's ask Sirakshi Rai.
She joins us.
She's the managing editor at The Hill.
It's a politics website based in D.C.
So a few more hurdles to go.
Take us through what happens next.
That's right.
We know that there is a tentative deal that's been struck by eight senators seven Democrats and one independent senators who basically crossed the line and are voting with the Republicans to get this compromise deal to a vote to end the shutdown.
But that doesn't mean the shutdown ends. as and when they pass this.
They're ready to vote at any point now in Washington DC, but this has to go back to the House, where it has to get a majority of votes.
Now the Republicans are in control of the House, but it is unclear whether or not all Republicans will sign on to this compromise deal.
And once it passes the House, it then goes to the president's desk.
He says that he will expedite this.
He's welcomed this compromise deal, but it still could be days before the shutdown officially comes to an end.
And then we have to deal with the additional hurdles of, you know, bringing the furloughed workers back.
How long will it take for the benefits to unravel?
How long will it take for the skies here in Washington, D.C. to be fully staffed again?
We know that there's a huge shortage of air traffic controllers here in the United States, and flights have been delayed progressively since Friday evening.
So a lot more still to be determined here.
But as of now, the shutdown could end anywhere from days, or it could take longer if the House does not agree to this deal.
A little while before William will see a paycheck hitting his bank account then.
Democrats have been holding out to try and prevent health care costs increasing.
William said that he doesn't trust any politicians, really.
How damaging is this for the Democrats?
William is exactly right.
That's the prevailing sentiment that is being expressed by most of the Democrats.
Now we know that these eight senators have crossed their party line and their party stance to vote with the Republicans.
But majority of the Democrats in the Senate are still not behind this compromise deal because they feel that it still does not get to those affordable health care credits that they've supposedly held out for for 41 days.
And the prevailing sentiment is that why did we shut down the government for 41 days if we were just going to cave on this with no guarantees that we were going to have any sort of an agreement or any sort of a deal reached on these affordable care subsidies?
But also damaging for the Republicans as well.
In a way, yes.
Right now, the public sentiment is that the Republicans control the House, the Senate and the White House.
So effectively, you know, it's always the party in power that is blamed.
But, in terms of messaging, the Republicans have been on point on their messaging in terms of blaming the Democrats for the shutdown.
And this recent event is kind of highlighting that in the eyes of the public, at least.
Well, listen, the economic cost of this 41 day shutdown is in the billions.
Listen, Listen to Ryan Sweet.
I spoke to him earlier.
He's the chief US economist for the global advisory firm Oxford Economics.
The government shutdown is going to be costly on the US GDP.
I mean the way that we calculate it.
Going bottoms up, looking at the hours worked and the wages of government workers, it comes out to about a tenth to two tenths of a percentage point off of GDP growth each week.
So you can see with each passing week, the economic costs mounts significantly.
So we're in day 41.
It looks like it's going to end this week.
So when it's all said and done, it's close to a percentage point of Q4 GDP growth.
So, in other words, without the government shutdown, the US economy would have probably grown close to 2.
Now we're going to grow close to 1% in the final three months of this year.
So in terms of billions, you've worked out that that is $16 billion per week.
It is.
It's 16 billion per week, which is a big number, but I do think that underestimates the overall economic cost of the shutdown, because the US economy is massive.
So $16 billion isn't make or break.
But to these individuals, more than 600,000 federal workers got furloughed.
These last five weeks have been extremely challenging.
I mean, they're missing paychecks.
Food stamps, for example, were partially disrupted.
So for many Americans this was a lot more costly than hearing 16 billion dollars per week in a 30-plus trillion economy.
You mentioned federal employees who've lost income, but how else does the shutdown damage the economy?
There's lots of moving parts.
This was a full shutdown, so defense contractors, government contractors in general, weren't getting paid some money that the government shells out for food stamps, for example, starting recently, wasn't being dispersed.
So that disrupted particularly lower-income households' ability to go out purchase the food they need to feed their families.
So primarily though, the biggest impact is in lost hours of government workers, that they haven't been working for the last 41 days.
Will the damage be recovered once everything reopens again?
Not all of it, because federal workers aren't going to make up all the lost hours that were impacted by the shutdown.
In other words, they're not going to be working overtime to make up for the hours that didn't occur during the shutdown.
But federal workers are going to get paid.
There's been legislation passed after the last government shutdown in 2018 2019 that stipulated that furloughed workers do get retro pay.
Therefore, some of the spending that these furloughed workers would have done at restaurants bars, going out to the movies or a ballgame, that will get made up.
But on net you're going to lose some output because federal workers again aren't going to be burning candles at both ends to make up for the hours lost during the shutdown.
Is there an impact that is short-term as well as long-term to this?
Not in the long run, unless this becomes a regular occurrence where the shutdowns are becoming longer and longer.
The economy's ability to grow in the long run is just a function of two things.
It's labor force growth and productivity.
And shutdowns are essentially not going to affect that.
You kind of think of a shutdown as a natural disaster.
Those economies.
The government shut down for a period of time, but once it reopens there's going to be a lot of activity happening.
Defense contractors are going to get paid.
These furloughed workers will get retro pay.
In the near term it's going to cause a lot of volatility in the employment numbers, retail sales, you name it.
It's probably going to get affected by the shutdown because, you know, 600 plus thousand people were furloughed and missed, you know, one or two paychecks.
So that's going to cause some noise in the data.
But in the end, we'll get some of that payback, starting in December or late November, into December and into Q1 of next year.
You say that though, but there's the potential that this could all happen again at the end of january.
It could.
It could be, you know, a bad rerun.
Uh unfortunately, the thing is, we know how the movie ends.
Eventually, they'll come to some sort of agreement and end the government shutdown, so hopefully this doesn't become a tool like the debt ceiling has been used in the past, and where it's just a political tool to to negotiate.
Uh, because government shutdowns, you know they're Clearly.
By our calculation, it's 16 billion a week.
It's not negligible.
So hopefully we're not shutting down again in early January.
And I think the odds of that occurring are pretty low because that is starting to get close to when the midterm election cycle begins to kick off in the US and voters will take notice.
That was Ryan Sweet there.
Chief economist, chief US economist at the global advisory firm Oxford Economics.
So actually, Rai is still with us.
She's the managing editor at The Hill.
What's your feeling, or what is the feeling in Washington, the people that you're talking to, about the possibility of a shutdown next year?
The Democrats are not ruling out the possibility of another shutdown showdown, as they say, when the next tranche of funding expires at the end of January.
One of the senators who basically went over to the Republican side to vote for this compromise deal said that the Republicans made it clear that this was the only deal on the table and that shutting down the government for another week or month didn't make sense, but that they will reconsider all the options on the table come January if there's no movement on this vote to extend the affordable health care credits here in the United States.
Sir Akshi Rai, Managing Editor there of The Hill.
Thank you very much for joining us today on the programme.
Well, markets have reacted strongly to this breakthrough in Washington.
Europe's stock, 600, finished 1.5% higher.
Best gain since May.
Similar rises across Asia.
In the US, indices jumped at the open with the S&P 500 and the Nasdaq both up more than a percent.
Let's find out how they closed today.
Peter Jankowski is with us.
Vice President of Research and Analysis at Arbor Financial Services in Chicago.
So how did we end the day, Peter?
Well, the S&P 500 was up a little more than one and a half percent, so a very strong day.
Leading the way.
We had information technology communication services, many of the high-flying type stocks that had been hurt.
Last week they came roaring back.
So do you think this market reaction is down to genuine optimism that the shutdown is going to end at some point this week?
Or are they all just simply relieved that these weeks of uncertainty might be nearly over?
I think there is genuine optimism that this will end the shutdown, hopefully by the end of this week.
And it'll take some time to get everything back to normal.
But I think particularly for flyers.
If they can get it done by the end of this week, we should be able to get through the Thanksgiving holiday season without too much trouble.
Peter, stay with us.
We will talk to you again in just a moment.
This is World Business Report from the BBC World Service.
Let's head to Brazil now where world leaders are gathering for COP30.
The sound there of indigenous Brazilian people dancing and chanting at the opening session on Monday.
Brazil's President Lula has called this COP the COP of implementation, the moment the world moves from promises to real climate action.
But this year's summit is just as notable for who is not in the room.
Several major leaders, including some of the world's biggest emitters, have chosen not to attend.
If the men who wage war were here at this COP, they would realise that it is much cheaper to invest 13 trillion to solve the climate problem than to invest 27 trillion to wage war, as they did last year.
Well, one man who has gone is the BBC's climate editor, Justin Rowlett, and he joins us now from there.
Justin, first of all, then give us a sense of what's happening.
Thousands of delegates have been pouring to the COP venue, which I believe is an old former aerodrome heavily air conditioned, because it's extremely hot, isn't it?
It's very hot.
It's very humid.
I mean, President Lula, the Brazilian president, chose this location very deliberately.
He wanted the COP to be held on the edge of the Amazon rainforest for a couple of reasons.
He wanted to celebrate Brazil's extraordinary biodiversity, but he also wanted to remind delegates what's at stake.
The Brazilian rainforest.
Lots of scientists say as the temperature rises, it's getting increasingly dry, less rain, less ability to sustain itself as a rainforest and there's a danger it would tip over, past a tipping point and become a savannah, losing this obviously, this reservoir of biodiversity, but also, of course, an incredible carbon sink, an incredible store of um.
You know, it was deliberately chosen it is hot, it's humid, it's uncomfortable.
The world leaders, as you say, came last week To kind of mark the opening.
And it was a bit disappointing.
Just a few dozen world leaders.
And as you say, the leaders of most of the most polluting countries were not here.
Most notably, I'm sure we're going to come to this.
Yeah.
The president of the United States, Donald Trump.
China and India.
Yeah.
So we get the during today.
The conference opens.
The official negotiations begin.
Just tell us.
It's actually been quite a smart.
And why have these big emitters like the US, China and India?
Have they either sent a low level representative or totally skipped the summit?
Why is that?
Well, there's a couple of categories, right?
So if we take China India Indonesia, the presidents and prime ministers of these countries don't always come to these conferences.
I mean, there was a landmark conference in Paris 10 years ago when it was turned up because they knew it was a landmark and it was going to pass a bit of climate history, the first time all the countries of the world agreed together to tackle climate change.
That doesn't happen every year.
President Xi does not travel much.
So we shouldn't be surprised then, should we not, that these people haven't turned up?
It's not that unusual for the world leaders of the biggest countries not to come.
The really obvious standout here not because American presidents always come, but is Donald Trump.
Because Donald Trump has taken such a stand against what this conference is all about tackling.
Focus the American economy on doubling down on fossil fuels, and you know what he calls America's energy dominance.
He wants America to be the world's energy superpower and he's encouraging the rest of the world to follow suit and using a scene over the last few months trade tariffs to try and encourage other nations to encourage I think it's a is a kind word coalesce maybe some other countries europe uh, you know japan south, south korea to buy american oil and gas.
So we're seeing two models, if you like 194 countries here trying to follow a path of clean technology and renewables and america trying to encourage the rest of the world.
Because he's very skeptical about climate change, he's saying you know do, do the Easy thing, the thing that builds your economy most quickly invest in oil and gas.
So really two pathways of development.
Thank you so much.
Justin Rolat there, the BBC's environment editor.
And from Brazil's climate summit to a country grappling with its own energy crunch.
The Netherlands has thousands of homes and businesses waiting to connect to the electricity grid and thousands more trying to feed back into it through their solar panels and other renewable systems.
But the grid simply can't keep up with the country's rapid shift to green energy, as the BBC's John Lawrenson reports from Rotterdam.
When we all use electricity at the same time, our power grid gets overloaded.
Explains this TV public service announcement.
This can cause malfunctions, so use as little electricity as possible between four and nine.
The Netherlands is electrifying extremely fast.
It has the highest number of electric vehicle charging points per capita in Europe, for example.
As for electricity production, the Netherlands has replaced gas from its large North Sea reserves with wind and solar, leading the way in Europe for the number of solar panels per person.
But the grid can't cope.
Kies.
Jan Rammo is the CEO of the Dutch energy producer and supplier, Eneco.
70, of whose electricity is now solar and wind.
Grid.
Congestion is like a traffic jam on the power grid, so it's caused by either too much power demand in a certain area or too much power supply.
The grid, he says, was designed when electricity was generated by a small number of big, mainly gas-fired power plants.
Then we used to have a grid system with very big power lines close to those power plants and increasingly smaller power lines as you got more towards the households.
And nowadays we're switching to renewable power and that means that there's a lot of power also being injected into the grid in the outskirts of the grid, where there's only relatively small power lines.
Here we're in the virtual power plant of Eneco.
At his company's head office in Rotterdam, Kiesjean Ramo shows me a very large control panel.
It's their virtual power plant that uses AI to help balance the grid.
The Dutch have been skilful in managing challenges to the grid so far, largely avoiding blackouts.
But for people and companies who want to scale up their use of electricity with a new or larger grid connection, that increasingly is just not possible.
Eugene Byings is in charge of grid congestion with Tenet, the company that runs the National Electricity Grid.
We have about 8000 companies who want to feed in electricity and produce with either solar panels or wind farms.
And we've got about 12,000 organizations who want to take off and consume electricity off the grid.
For both categories, the grid is congested.
For some of the members of the Dutch Chemical Association, for example, whose president is Ninka Homan.
Grid congestion is putting the future of the Dutch chemical industry at risk.
The problem with chemical industry is they're all value chains.
Chemical processes are mostly combined processes.
And if you lose a part of that, then it can have a chain reaction.
Grid company Tenet says it'll need 230 billion of investment in the grid to make it fit for purpose by 2040.
That was the BBC's John Lawrenson reporting there.
Well, the world's most famous investor, Warren Buffett, says he's going quiet as he prepares to step back from Berkshire Hathaway at the end of the year.
Let's talk to Peter Jankowskis about this.
He's still with us.
He is Vice President of Research and Analysis at Arbor Financial Services.
I mean, Warren Buffett has been a defining figure, hasn't he, in global finance for more than half a century.
This is quite a significant moment that he's stepping back by the end of the year.
And as he says, going quiet until the end of the year.
Well, he has been preparing his successor for a number of years.
I think Berkshire will do fine, but you're absolutely right.
It's hard to replace a spokesman, if you will, of his stature, and it remains to be seen, the next time that we go through a crisis of some kind in the market, what it will be like to be missing that stabilizing voice.
He certainly played a very substantial role in helping Berkshire, The US economy and other economies weathered the financial crisis back in 2008, and it'll be interesting to see who steps up to take that role going forward.
What did he do in 2008 that managed to kind of calm things down?
Well, one, he stepped up with cash.
Many of these financial firms are really struggling and he stepped up now greatly to Berkshire's benefit.
You know he stepped up and was able to buy preferred shares with very generous dividends for many of these companies that were short on cash.
He used his letter to warn about CEO envy and greed.
It's unusual, isn't it, to hear that kind of straight talking from someone who has got such a lot of money.
Well, he's always himself lived relatively frugally, and You know his wealth has derived from the shares that he owns in Berkshire.
It hasn't come from a rich pay package.
So in many ways, he's continuing a theme that he stressed in the past.
Interesting stuff.
Peter Jankowskis, Vice President of Research and Analysis at Arbor Financial Services.
Thank you very much for joining us on the program.
That's all we have time for today.
The producer today was Victoria Holland.
I'm Sam Fenwick.
Thanks very much for listening.
