HOW DID 9/11 AFFECT NEW YORK'S ECONOMY? New GAO Report Assesses Top 9/11 Economic Impact Studies

Jun 6, 2002
Press Release

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NEW YORK: At the request of eight members of Congress from New York, the United States General Accounting Office (GAO) has produced the first official assessment of major economic impact studies of the September 11th terrorist attacks on New York.

The report, conducted over a four month period and released in final form today, evaluates studies that projected costs and losses from 9/11, identifies potential future costs that could affect New York's economy, and details the insurance payments and government aid directed for the 9/11 recovery so far.

The members of Congress who requested and received the study released the following joint statement today:

"This report is an important step toward a more thorough understanding of 9/11's impact on the New York economy. It gives us a clearer vision of what needs to be done to encourage economic growth for the city and avoid a drawn out recession for the region. Our next steps will be to determine the extent to which future aid is needed for direct assistance, strategic development, and long-term recovery. Our colleagues in Congress and President Bush, his cabinet, and staff have supported New York's rebuilding efforts, but the details of the ongoing recovery, with the emerging challenges and remaining uncertainties detailed in this study, will require our vigilant attention in the months ahead."

The members of Congress who requested the study are: Carolyn Maloney, Charles Rangel, Nita Lowey, John LaFalce, Maurice Hinchey, Jerrold Nadler, Jose Serrano, and Steve Israel.

Key points from the GAO review are highlighted on the following page while the full report can be viewed at www.house.gov/maloney/sites/maloney.house.gov/files/documents/olddocs/gaoreport.pdf.

 

Contacts: Ben Chevat (Maloney) 202.225.7944, Eric Schmeltzer (Nadler) 202.225.5635

 

Jack Pratt (Israel) 202.225.3335, Dale Crowell (Serrano) 202.225.4363,

Elizabeth Stanley (Lowey) 202.225.6506

Summary sheet follows . . .

Key Findings of GAO Review of Studies of the Economic Impact

of the September 11, 2001 Terrorist Attacks on the World Trade Center:

(As Summarized by the Office of Congresswoman Carolyn B. Maloney)

ORGANIZATIONS PRODUCING THE STUDIES REVIEWED

New York City Office of the Comptroller

New York Governor and State Division of the Budget

New York City Partnership and Chamber of Commerce

Fiscal Policy Institute

New York State Senate Finance Committee

Milken Institute

New York State Assembly Ways and Means Committee

ADDITIONAL STUDIES DISCUSSED FROM:

Federal Reserve Bank of New York

New York City Independent Budget Office

Fiscal Policy Institute - Updated Study

KEY POINTS AND STATEMENTS IN REPORT

The New York City Partnership and Chamber of Commerce study generated "the most comprehensive estimates" of "direct and indirect losses, payments, and increased economic activity": $83 billion in losses offset by an estimated $14 billion in payments from the federal government, $37 billion from private insurance, and $16 billion in increased economic activity from the payments and increased construction, for a net loss of $16 billion.

The study, taking a national perspective, says that some of the losses to the New York economy are offset by gains for New Jersey and Connecticut, but it does not say how New York can make up for such shifts in economic output.

The GAO review states that part of GAO's follow-up work will be "reviewing estimates of the effect of the terrorist attacks on tax revenues to New York." Page 40

Statements regarding emerging challenges and uncertainties:

. "More data on the economy's performance since September 11, 2001, are becoming available, but as the

attacks become more distant in time, it may be less easy to disentangle their economic effects from other events that would have occurred anyway (such as the fallout from Enron and changing macroeconomic conditions)." Page 36

. "Since the terrorist attacks caused a substantive shock to the New York City economy, it is not yet known

whether the [economic] models measured it accurately." Page 33 . "All the studies' estimates are moving targets because the cleanup and other activities are still going on, and

the attacks' full consequences on factors such as survivors' health may not be known for years." Page 35

The GAO study also points out that additional costs could be incurred or realized:

. if the foundation at the WTC site needs repair

as the long term consequences of the attacks on the health of those who experienced 9/11 become known

The study acknowledges that the economic recovery in New York may lag behind the national recovery. It also says that economic impacts from losses and payments may ripple through the economy well after the disaster.

"No study estimated specific losses to nonprofit entities or small businesses." Page 20

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