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Estimated reading time of this week’s update: 13 minutes
Link HERE to contribute to the Capital Area Food Bank which is distributing food to federal employees not receiving paychecks due to the shutdown.
(1) SHUTDOWN DAY 27: Senate Has 12 Times Rejected House-passed Stopgap Funding Measure (CR); Senate Dems Continue Withholding Support from CR to Force Negotiations on Health Subsidy Extension, While Speaker Johnson Has Kept House Out of Session to Prevent Negotiations.
Background: The Federal government was required by law to shut down on October 1st when the new fiscal year began because Congress had not passed funding bills for fiscal year (FY) 2026. Shutdowns are required by the Antideficiency Act, which makes it a criminal violation for federal employees to incur obligations on behalf of the federal government without congressional spending authority.
House-Passed CR: The House of Representatives in September passed 217-212 a stopgap continuing resolution (“CR”) to provide temporary funding through November 21st, but the Senate has failed has to pass the measure 12 times, most recently last Wednesday, Oct. 22. (The Senate has also failed 7 times to pass a Democratic alternative CR, most recently on Oct. 9.)
Furloughed vs. Excepted Employees: During a shutdown, the Antideficiency Act requires that Federal agencies furlough employees (no work and no pay until appropriations are enacted) unless they are designated as “excepted” because their responsibilities impact the “safety of human life or the protection of property.”
“Excepted” employees are required to work, but are generally not paid until appropriations are enacted (unless funds authorized outside the annual appropriations process, called “mandatory spending,” are available to pay them.)
Last Thursday, the Senate failed to pass a GOP-sponsored bill to pay excepted federal workers and active duty military. The measure failed 54-45 (60 being required) with all Democrats, except three, opposing the bill. Democrats then sought consent to pass a broader bill that would pay all federal employees, but Republicans blocked the bill.
5 More Votes Needed in Senate: With 60 votes required in the Senate to advance a CR, Republicans need the support of 8 Democrats or Independents to pass the measure. Thus far, only 3 have supported the stopgap funding (Cortez Masto (D-NV), Fetterman (D-PA), and King (I-ME). One Republican (Paul, R-KY) opposes the funding levels in the CR, which is why the 53-member Senate Republican conference needs to find 8 votes to reach 60.
Senate Dems Withholding CR Support to Force Negotiations on Healthcare and Spending Authority: Nearly all Senate and House Democrats are continuing to withhold their support of the stopgap measure in order to force a negotiation with Republicans to enact provisions that would:
permanently extend enhanced Affordable Care Act (ACA) health premium subsidies (which will expire at year’s end); and
restore appropriated funds President Trump’s OMB has illegally impounded.
So far, Republicans Are Not Negotiating: There have been no negotiations and House Speaker Mike Johnson has kept the House of Representatives out of session for 4 weeks, in order to pressure Senate Democrats to accept the House-passed CR.
With no negotiations under way to extend the enhanced ACA premium subsidies, average ACA premiums are set to rise 30 percent. People start shopping for their ACA health plans on November 1; some of the increases have already been posted.
To access the numbers of “furloughed” and “excepted” employees at individual departments and agencies, see our shutdown webpage.
(2) SHUTDOWN’S ADVERSE IMPACTS BEGIN TO MOUNT: Congress Losing its Power over Spending; 1.4 Million Federal Workers are Not Being Paid; Federal Food Benefits for Millions Stopping in November; Flight Delays and Possible Air Safety Issues Heading into the Holidays; Nutrition for Women, Infants, and Children (WIC) Program has Insufficient Funds for November; Head Start Funds Running Dry; Disaster Relief Fund Hits Critical Low; U.S. Adversaries See Weakness; No Inflation Data.
THE SHUTDOWN HAS EMBOLDENED WHITE HOUSE BUDGET DIRECTOR VOUGHT’S EFFORTS TO SEIZE CONGRESS’S POWER OF THE PURSE—freezing billions in funds for Democratic-led states, attempting layoffs of thousands of federal employees (temporarily blocked by court order), and reprogramming funds without congressional approval.
Adding to Congress’s marginalization and loss of power, work on the 12 regular Appropriations Bills has stopped with Speaker Johnson having kept the House out of session since September 29.
1.4 MILLION FEDERAL WORKERS ARE NOT BEING PAID: Most federal workers missed their first full paychecks last Friday, October 24. The shutdown has halted federal worker pay for “excepted workers” (who continue to work without pay) and furloughed workers (who will not return until the shutdown is over). The last (partial) paycheck was October 10, although some excepted employees—including military personnel and some DHS employees—are being paid from “mandatory” (not annually appropriated) funding sources and private donations.
Due to constitutional requirements that prohibit pay reductions, pay continues for the President, Congress, and Supreme Court unless they ask for checks to be withheld.
FEDERAL FOOD BENEFITS FOR MILLIONS STOPPING IN NOVEMBER: Federal funds for food (“SNAP”) benefits assisting 42 million low-income Americans will run out on November 1. The Trump Administration has decided not to tap $5 billion in emergency funds to pay for the food benefits—a decision likely to be challenged in court by Democrats. Governors, county executives, mayors, churches, and nonprofits will have to determine how to address food emergencies in each location. Governors in Louisiana and Virginia have declared emergencies in order to access emergency state funds, however, Maryland will not step in to fund SNAP benefits.
FLIGHT DELAYS AND POSSIBLE AIR SAFETY ISSUES HEADING INTO THE HOLIDAYS: More than 13,000 air traffic controllers will miss their paychecks this Wednesday due to the shutdown. Working without pay is leading to an increase in air traffic controllers calling in sick—resulting in flight delays and possible safety issues due to overstressed, exhausted controllers worried about paying bills and working second jobs.
NUTRITION FOR WOMEN, INFANTS, AND CHILDREN (WIC) PROGRAM will have insufficient funds to cover benefits through November—potentially impacting seven million low-income women and children.
HEAD START FUNDS RUNNING DRY: The federally funded low-income preschool program is currently operating on reserve funding that will run out, putting more than 65,000 children at risk of losing services and parents scrambling for childcare.
DISASTER RELIEF FUND HITS CRITICAL LOW: When the funding completely dries up, calls to FEMA’s help line will go unanswered and disaster survivors may be unable to register for federal assistance.
This comes at a time when the Trump Administration has already slowed federal disaster response and aims to push disaster response onto already strapped state governments which lack the federal government’s ability to raise emergency funds.
ADVERSARIES SEE WEAKNESS: Former Defense and CIA Chief, Panetta, says the shutdown signals weakness to America’s foes. He’s right.
NO INFLATION DATA: The government shutdown is likely to mean no inflation data next month for the first time in decades—broadly impacting governmental and private sector decisionmaking.
STATE-SPECIFIC IMPACTS: NPR has posted state-specific shutdown impacts HERE.
(3) TARIFFS AND THE ECONOMY: Inflation at 3%; Trump Approval on Economy Hits New Low; Trump Announces Trade “Frameworks” with Southeast Asia; U.S.-Canada Impasse; SCOTUS Review of Tariffs; China’s Soybean Feud with Trump.
INFLATION at THREE PERCENT: American’s inflation is back at 3 percent – higher than the longstanding Federal Reserve target of 2 percent which impacts their interest rate decisions.
TRUMP APPROVAL ON ECONOMY HITS NEW LOW: Just 38 percent of respondents said they approve of the president’s handling of the economy, while 57 percent disapproved.
TRUMP ANNOUNCES TRADE “FRAMEWORKS” WITH SOUTHEAST ASIA: On Sunday, President Trump announced tariff exemptions on key exports from several countries in Southeast Asia—Thailand, Cambodia, Vietnam, and Malaysia—in an apparent attempt to strengthen his hand in his upcoming meetings with Chinese President Xi Jinping. However, these “framework deals” are short on details and unenforceable in their current form.
US-CANADA IMPASSE: On Saturday, President Trump said he’s halting negotiations with Canada and increasing tariffs on Canadian goods by 10 percent as retribution for the province of Ontaria releasing an advertisement quoting former President Reagan’s opposition to tariffs. This impulsive reaction by Donald Trump underscores why the Founders gave Congress, not the President, the power to enact tariffs and taxes, and the foolishness of Congress in passing statutes delegating this immense authority to one individual. Prior to the announcement of this tariff increase:
Canada had a base tariff of 35 percent, although that does not apply to goods shipped with the rules of the US-Mexico-Canada Agreement (USMCA);
Canadian-made cars and trucks were only partially eligible for the USMCA exemption; and
Steel and aluminum from Canada were subject to 50 percent tariffs.
It remains to be seen how Trump’s impulsive 10 percent increase will be applied to existing tariff taxes on Canadian goods. Watch the Ontario advertisement.
SCOTUS Review of Tariffs: Former Fed Chairs Yellen and Bernanke and 50 economists urged the Supreme Court last week to overturn most of President Trump’s tariffs. The justices are set to hear arguments in November on whether Trump legally issued the tariffs under the 1977 International Emergency Economic Powers Act, a law that gives the president financial tools to address national security, foreign policy and economic emergencies. The tariffs, which include levies of 10%-50% on most US imports, remain in place for now, despite a federal appeals court ruling that the President exceeded his authority by imposing them.
CHINA’S SOYBEAN FEUD WITH TRUMP has left U.S. farmers with huge supplies and few buyers.
(4) OTHER MAJOR DEVELOPMENTS ACROSS GOVERNMENT: Man Pardoned by Trump Threatens House Democratic Leader; Demolishing the East Wing of the People’s House without Congressional Authorization or Oversight; Arizona AG Sues Speaker Johnson; GOP Dissents on Shuttering of CDFI; Universities v. Trump; Colorado Seeks to Cap Drug Price; Covering up Effects of Climate Change; Ethics Issues Abound; Immigration.
MAN PARDONED BY PRESIDENT TRUMP after storming The Capitol on January 6, 2021, is charged with THREATENING TO KILL HOUSE DEMOCRATIC LEADER HAKEEM JEFFRIES.
DEMOLISHING THE WHITE HOUSE EAST WING, “THE PEOPLE’S HOUSE,” WITHOUT CONGRESSIONAL AUTHORIZATION OR OVERSIGHT: In July, President Trump lied to the American people, saying his ballroom project, “Won’t interfere with the current building. … It’ll be near it but not touching it — and pays total respect to the existing building, which I’m the biggest fan of.”
ARIZONA ATTORNEY GENERAL SUES SPEAKER JOHNSON for failing to seat Adelita Grijalva, elected to represent her district in Congress. The people of her district currently have no representation in Congress.
IN A RARE ACT OF DISSENT, 101 Republicans sent a letter asking the Trump administration to reverse its decision to fire all employees at the Community Development Financial Institutions (CDFI) Fund.
UNIVERSITIES v. TRUMP: All but two universities approached rejected a plan to steer federal money to schools aligned with President Trump’s priorities.
COLORADO SEEKS TO CAP KEY DRUG PRICE: In a state first, Colorado will cap the price of Enbrel, an arthritis drug. Using patent tactics, the drugmaker Amgen has aggressively blocked competition.
COVERING UP CLIMATE CHANGE: In their effort to cover up the effects of climate change, the Trump Administration earlier this year shut down a database tracking the most expensive weather disasters. Now, it’s back, under private sponsorship and it shows over $100 billion in losses due to extreme weather in just the first six months of 2025. The relaunched database is HERE.
ETHICS ISSUES ABOUND: Trump pardoned his family’s crypto pal; Trump’s son is poised to profit from a Pentagon drone proposal; Trump has demanded $230 million of taxpayer dollars from the Justice Department in “compensation” for federal investigations of him; and who is funding Trump’s several hundred million dollar ballroom?
IMMIGRATION: Washington Post reports that Trump’s new refugee plan seeks Afrikaners and virtually no one else, with plans for overall admissions set as low as 7,500; Politico reports that ICE is hiring health workers as lawsuits and deaths in custody mount; and a ProPublica investigation found that “more than 170 U.S. citizens have been held by immigration agents…kicked, dragged and detained for days.”
(5) THIS WEEK’S SUGGESTED READS:
Amid the Rubble of the East Wing, Lessons in How Trump Exercises Power – NYT/Sanger
The Lone House Democrat Who Thinks His Party Has the Shutdown All Wrong.- WSJ
They’re Small, Yellow and Round – and Show How Trump’s Tariffs Don’t Work – NYT
About the author: Charles S. Konigsberg, J.D., served as Assistant Director at the White House Office of Management and Budget for three successive Budget Directors; General Counsel at the U.S. Senate Finance Committee; Minority Chief Counsel at the U.S. Senate Rules Committee; Staff Attorney at the U.S. Senate Budget Committee; Director of Congressional Affairs at CFPB and AmeriCorps; and Staff Director of a national bipartisan budget task force.
He is author of the book, Trillions: A Primer on Federal Spending, Taxes, the U.S. Debt Ceiling, and Fiscal Law. Click here to purchase.
He is also Publisher of:
Appropriations.com which tracks the 12 appropriation bills, the shutdown, and presidential impoundment developments each day;
andGovBudget.com which tracks major developments, by subject area, each day including: Law & Democracy | Cut Tracker | WH-OMB-DOGE | Economic News | Federal Taxes | Tariffs | Health and Human Services Programs | Debt, Deficits and Debt Limit | Discretionary Spending Programs | Mandatory Spending Programs | Immigration | Disabilities Programs | Defense | Climate/Energy | Budget Process
Speaking engagements and press interviews can be scheduled by calling: (202) 818-8578 or (301) 509-5688. Email comments, suggestions, and questions to: ckonigsberg@capitolpublicpolicy.com.