White House says Trump was ‘right again,’ blames Democrats for slowdown as GDP drops to 1.4%

White House points finger at Democrats

The White House said Democrats tanked the economy.

On Feb. 20, 2026, the administration blamed what it called the Democrats’ 43-day government shutdown for dragging down economic growth at the end of 2025.

The statement came the same day new numbers showed the economy grew at just 1.4% in the final quarter, a sharp drop from 4.4% in the previous quarter.

Deputy Press Secretary Kush Desai said full-year growth still beat predictions from the Federal Reserve, the Congressional Budget Office (CBO), and the International Monetary Fund.

GDP growth fell well below forecasts

The Bureau of Economic Analysis (BEA) reported the economy grew at an annualized rate of about 1.4% in the fourth quarter of 2025. Forecasters had expected something closer to 2.5%.

For the full year, the economy grew about 2.2%, down from 2.8% in 2024. Consumer spending, which drives most of the economy, rose about 2.4% in the fourth quarter.

That sounds decent, but it was a clear step down from the 3.5% pace in the third quarter. Government spending fell roughly 5% as the shutdown took hold.

The shutdown shaved about a point off growth

The BEA estimated the shutdown knocked about 1 percentage point off fourth-quarter GDP growth. Without it, the economy would have grown at roughly 2.4%, a normal pace for a healthy economy.

President Donald Trump repeatedly said the shutdown cost at least 1.5 to 2 points, but the official numbers came in lower.

The CBO had projected a bigger hit of about 1.5 points for a six-week shutdown, but the actual measured drag was smaller than both estimates.

Federal workers bore the heaviest burden

The shutdown hit federal workers hard. About 670,000 employees were furloughed, and roughly 730,000 more had to keep working without paychecks.

By the time the shutdown ended, the government had withheld close to $14 billion in wages from civilian employees. The pain spread beyond government offices.

Food assistance through the SNAP program faced disruptions, some TSA agents stopped showing up to work, and security checkpoints closed at several airports, causing travel delays.

Health insurance subsidies triggered the fight

The shutdown started Oct. 1, 2025, after Senate Democrats blocked a Republican spending bill to keep the government funded.

Democrats wanted the bill to extend expanded Affordable Care Act (ACA) health insurance subsidies, which were set to expire at the end of 2025.

Republicans said Congress should handle the subsidies separately after reopening the government. The stakes were high.

A record 24 million Americans had ACA marketplace plans, and without the expanded subsidies, average out-of-pocket premiums were expected to more than double.

Polls showed Americans mostly blamed Republicans

The White House put all the blame on Democrats, but most Americans saw it differently. An NBC News poll from late October found 52% of voters blamed Trump and Republicans, while 42% blamed Democrats.

A Quinnipiac poll showed a similar split, with 45% blaming Republicans and 39% blaming Democrats. Among independent voters, the blame leaned even more heavily toward Republicans.

About 11% of people in the Quinnipiac survey blamed both sides equally.

Eight Senate Democrats broke ranks to end it

The shutdown finally ended after eight Senate Democrats split from their party’s leadership on Nov. 9, 2025, and voted to move a funding deal forward.

The deal funded several agencies for the full year and kept others running through Jan. 30, 2026. It also guaranteed a December Senate vote on the Democrats’ ACA subsidy bill, though it did not promise a House vote.

President Trump signed the bill on Nov. 12, ending the longest government shutdown in American history at 43 days.

ACA subsidy fight outlasted the shutdown

Ending the shutdown did not fix the health insurance fight. In December 2025, the Senate held dueling votes on two different plans.

Democrats proposed extending the enhanced ACA subsidies for three years. Republicans proposed shifting the money toward health savings accounts instead.

Both bills failed 51-48. Congress then left for holiday recess without solving the problem.

The expanded subsidies expired at the end of 2025, and millions of Americans started facing higher premiums in 2026.

Economists expect most losses to bounce back

The CBO estimated most of the lost GDP would come back in early 2026 as federal spending kicked back in. The permanent loss from the six-week shutdown came out to about $11 billion, less than 0.04% of GDP.

The Federal Reserve had projected growth would drop about 1 percentage point in the fourth quarter and rise by about 1 point in the first quarter of 2026.

Several economists described the fourth-quarter slowdown as a temporary blip, not a sign of deeper trouble.

AI spending kept businesses investing

Even with the shutdown dragging things down, parts of the economy stayed strong.

Companies kept pouring money into artificial intelligence, building data centers, and buying related equipment.

Investment in intellectual property grew about 7.4% in the fourth quarter, and equipment investment rose about 3.2%. Health care spending also drove much of the consumer spending growth.

The Republican tax bill passed in mid-2025 helped too, since it let businesses take immediate tax deductions on capital spending.

Another shutdown already looms over Washington

The economy might not get much breathing room. A second partial shutdown began in mid-February 2026 over a Department of Homeland Security funding dispute tied to immigration enforcement.

Economists project the economy will grow about 2.2% to 2.4% in 2026, with AI investment expected to stay strong. Housing remained a weak spot all through 2025, with residential investment falling every quarter.

Inflation stayed above the Federal Reserve’s 2% target, with prices rising about 2.9% in the fourth quarter.

Shutdowns keep happening, and the costs add up

The 2025 shutdown became the longest in American history, beating the 35-day shutdown of 2018-2019. Since 1980, 11 funding gaps have led to government shutdowns.

Both parties have used them as leverage. Republicans held firm over border wall funding in 2018-2019, and Democrats dug in over health subsidies in 2025.

The Congressional Research Service noted that shutdowns cause real harm to federal workers and their communities, even when the broader GDP hit fades quickly.

This article was created with AI assistance and human editing.

Read more from this brand:

• Major U.S. Banks Closing 300+ Branches Right Before Christmas
• America Will Owe $52 Trillion in 10 Years and Nobody Has a Plan
• What experts predict for new home construction in the U.S. in 2026