PODCAST: If you download the Substack App (available on IOS and ANDROID) you can listen to audio versions of all Trillions columns.
Estimated reading time of this week’s update: 13 minutes
(1) APPROPRIATIONS: Senate Rejects House-Passed CR and Democratic Alternative; Reason for Impasse--Dems Want Healthcare Relief Provisions Added, While GOP Refuses Bipartisan Talks.
Background: Fiscal Year 2026 begins Wednesday, October 1, 2025. Congress is not close to completing the 12 regular appropriations bills to keep agencies and programs funded; only 3 of the 12 bills are in final House-Senate negotiations. Therefore, the federal government will automatically shut down at midnight September 30 without enactment of a stopgap continuing resolution “CR.” Passage of a CR requires 60 votes in the Senate. Republicans, with only 53 votes in the Senate, need Democratic support.
The House on Friday passed a GOP continuing resolution (“CR”) 217-212 on a nearly party line vote (GOP Reps. Thomas Massie of Kentucky and Victoria Spartz of Indiana voted “no,” while Democratic Rep. Jared Golden of Maine voted “yes,” in the only defections.) However, later on Friday the Senate failed to pass the House GOP CR 44-48, and also failed to pass the Democratic alternative (including healthcare relief provisions) 47-45 (60 votes being required).
Senate Rejected House-Passed CR (HR 5371): CR Text | Summary | GOP Stmt | D-Stmt
Senate Rejected Democratic Alternative: Text | Sec-by-Sec Summ | Fact Sheet | Health Fact Sheet | D-Stmt
Reason for the Impasse--Democrats want healthcare relief provisions added to the funding stopgap measure and a reversal of presidential rescissions, while the White House is urging Republicans not to negotiate. Specifically, Democrats are seeking an extension of expanded Affordable Care Act premium subsidies and repeal of the recent Medicaid cuts, as well as extension of funds frozen by OMB’s “pocket rescissions.”
President Trump has urged House and Senate Republicans not to negotiate with Democrats.
Schumer-Jeffries Letter to Trump: On Saturday, 9/20, Senate Minority Leader Chuck Schumer and House Minority Leader Hakeem Jeffries sent a letter to Trump accusing him of wanting a shutdown and urging Republicans to negotiate.
Both the House and Senate are in recess next week. Senators are due back on September 29 and reportedly may have a repeat vote on the House-passed CR, but absent an effort by the White House to convene the joint leadership to negotiate a bipartisan compromise, the federal government is on track to run out of funding and shut down at midnight September 30.
Wondering whether President Trump is willing to shut down the government? Consider this: the longest shutdown in history occurred during the first Trump Administration, from December 22, 2018, through January 25, 2019.
For background on shutdowns, see https://appropriations.com/government-shutdown/. The most recent guidance on shutdowns is set forth in OMB Circular A-11, Released August 29 2025 in Section 124. Trump’s budget office has not yet posted shutdown plans for each of the federal agencies.
Overview of Action on the 12 Regular Appropriation Bills: The House Appropriations Committee has completed action on 12 bills (without bipartisan negotiations) and 3 of the bills have been approved on the Floor (Defense, Energy-Water, and MilCon-VA).
The Senate Appropriations Committee has completed action on 8 of the 12 bills (with substantial bipartisan support) and 3 of the bills have been approved by the full Senate (Agriculture, Leg. Br., MilCon-VA).The House and Senate are currently negotiating final versions of 3 bills: the Ag-Rural-FDA, Legislative Branch, and Military Construction-VA bills. For daily updates with full details, see appropriations.com.
(2) PRESIDENTIAL IMPOUNDMENTS: Hundreds of Billions Currently Being Withheld, Tens of Billions to Expire Sept. 30; Administration Illegally Blocking FEMA Funds.
The scope of funds illegally frozen by the Office of Management and Budget is emerging since courts ruled in August that OMB apportionment of funds must be made public. Appropriators now estimate hundreds of billions have been withheld—of which tens of billions will permanently expire on September 30, 2025.
Democrats call for OMB to have a “dedicated and full-time inspector general.” (Publisher’s note: this is a good idea with Trump’s OMB routinely and flagrantly violating appropriations law.)
Illegally Blocking FEMA funds: The Government Accountability Office finds Trump is illegally blocking Federal Emergency Management Agency (FEMA) funds.
(3) TARIFFS: Hiring Stalls as Tariffs Hit; Tariffs Push Up Medical Device Prices; Trump Fed Appointee Claims Tariffs Don’t Impact Prices.
U.S. companies put brakes on hiring after Trump tariffs hit – Financial Times
Trump Tariffs on European Union medical devices are projected to drive up U.S. patient bills, reports the Financial Times.
Trump’s Fed Appointee Parrots Trump’s Misdirection on Tariffs: Trump’s new Federal Reserve appointee Stephen Miran told CNBC he doesn’t anticipate tariffs causing inflation—a disingenuous notion that U.S. companies importing foreign products will absorb the entire cost of historically high tariff taxes (highest since 1935), on products from dozens of countries, without raising prices to U.S. consumers.
(4) THE ECONOMY AND THE FEDERAL RESERVE: Fed Lowers Key Rate; Food prices shoot up; Long-Term Unemployment Increasing; Trump’s Increasing Interference in Private Sector Investment Decisions.
The Federal Reserve Announced the First Rate Cut in 9 months, signaling that more cuts could follow. The Fed cut its benchmark interest rate Wednesday by a quarter point.
Prior to the Wednesday announcement, a court blocked a last-minute Administration attempt on Monday to remove Lisa Cook from the Fed board.
Grocery Prices up almost 30% in 5 years, Stressing Half of America: “The pandemic initially snarled (food) supply chains... That was compounded in 2022 by Russia's invasion of Ukraine… Avian flu added to the more recent spike in egg prices. And now President Trump's tariffs are pushing up the price of imported foods like bananas and coffee. Last month saw the biggest jump in grocery prices in almost three years…
A survey this summer by The Associated Press and NORC found the cost of groceries has become a major source of stress for just over half of all Americans — outpacing rent, health care and student debt.”
Long-Term Unemployment Increasing: The Washington Post reported this week that long-term unemployment—workers jobless for six months or more—is at a post-pandemic high.
WSJ reports Trump Administration’s plans to further involve federal government in private sector decisions: “Under the plan, the administration would use money from a $550 billion investment fund established as part of trade negotiations with Japan to invest in the development of semiconductors, pharmaceuticals, critical minerals, energy, ships and quantum computing.”
Publisher’s Note: Don’t worry about this particular fund; this is phantom money that will never materialize. What you should worry about is the predilection of this Administration to deeply involve President Trump and the federal government in private sector investment decisions—a radical departure from the GOP’s traditional support of an unfettered free market.
(5) MAJOR DEVELOPMENTS ACROSS GOVERNMENT: Freedom of Speech at Risk; NM Launches Universal Child Care; ACA Health Premiums to Shoot Up; Cancer Infrastructure at Risk; US Backs Away from NATO Leadership; Trump’s Rollback of Mental Health Coverage; Vast ICE Expansion; COVID Deaths May Increase; Raising Social Security Age; Rising Electric Bills; Discouraging Immigration of Skilled Workers; US Ceding Leadership on Clean Energy to China; Defense Pork Tops the List of Government Waste.
Freedom of Speech at Serious Risk:
New Mexico Launches Universal Child Care: New Mexico will be the first to offer free child care, regardless of income, paid for largely through the state’s oil and gas revenue.
KFF Says Big Increases Expected in Affordable Care Act health premiums: An analysis of initial rate filings for Affordable Care Act (ACA) Marketplace plans submitted by 312 insurers in all 50 states and the District of Columbia finds the median proposed increase for 2026 is 18%. Insurers cited the expiration of enhanced ACA premium subsidies as a significant factor in their rate hikes for next year. The full analysis and other data on health costs are available on the Peterson-KFF Health System Tracker.
America’s Cancer Research Infrastructure is Under Threat in one of its most productive moments due to Trump Administration funding cuts, reports the New York Times.
U.S. Backs Away from NATO Leadership:
Trump’s Rollback of Equal Treatment for Mental Health Coverage could lead to more Americans going without care, reports ProPublica.
Background.--Equal treatment for mental and physical health used to be a bipartisan issue, championed by Republican Senator Pete V. Domenici and Democratic Congressman Patrick Kennedy. The Trump Administration has paused rules that would have held insurers accountable for unlawfully denying coverage.
GOP’s Expansion of Government: In the wake of President Trump’s megabill increasing spending by $150 billion to advance his arrest, detention, and deportation of millions of immigrants, Immigration and Customs Enforcement (ICE) is looking to open hundreds of new offices across the U.S.
COVID deaths may increase after Kennedy’s advisers changed CDC guidance. AP reports that “until now, the vaccinations had been recommended as a routine step in the fall for nearly all Americans — just like a yearly flu vaccine…. (Kennedy’s new) advisers to the Centers for Disease Control and Prevention took the unprecedented step of not recommending them even for high-risk populations like seniors.”
One vaccine expert responded, “The good news is anyone can get this vaccine. The bad news is that no one is encouraged to get it.”
CDC data estimated that COVID resulted in 32,000 to 51,000 U.S. deaths last fall and winter and more than 250,000 hospitalizations.
However, in positive developments, STAT reports that a major health insurers group says its member plans will continue to cover all shots recommended by a federal advisory committee prior to any changes by Kennedy’s new appointees. In addition, the New York Times reports that groups of states are now banding together to issue their own recommendations to counter Kennedy’s group of appointees.
Raising Social Security Retirement Age: The Trump Administration is reportedly considering raising the retirement age to save Social Security from insolvency in 2034. There are many other ways to secure the program. See the Domenici-Rivlin proposal from 2010.
Expect Rising Electricity Bills as a result of the rollback on green-energy subsidies in Trump’s megabill signed July 4, 2025. By comparison, China’s “all of the above” approach to electricity generation enabled them to add 93 gigawatts in May alone, compared to 63 gigawatts in the U.S. for the entire year.
Discouraging U.S. companies from bringing skilled workers into the U.S.: President Trump on Friday imposed a $100,000 fee for H-1B visas used by U.S. employers to bring highly skilled workers into the U.S. Trump claimed the action would encourage employers to hire American workers. However, the result will likely be that highly skilled workers will go to Canada, Europe or other advanced economies, weakening U.S. competitiveness.
At the same time, Trump ordered the creation of a “gold card” that would fast-track visas for wealthy foreigners able to pay $1 million. Oddly, Commerce Secretary Lutnick thinks the million dollar price tag will bring us “extraordinary people.”
Chipping Away at Bipartisanship: As explained in last week’s Trillions, Senate Republicans used a backdoor approach to changing Senate rules to confirm 48 Trump nominees as a group on Thursday. This continues the long slide down a slippery slope towards full elimination of the filibuster – the only remaining Senate rule that incentivizes bipartisan negotiations.
Education Funding: The Trump Administration has rerouted funds intended for colleges that serve large populations of minority students to charter schools and other administration priorities.
China Taking the Lead on Green Energy Technologies: Former Vice President Al Gore says that Trump Administration policies are paving the way for China to extend its lead in the low-carbon economy, with geopolitical ramifications.
Defense Pork Tops the List of Government Waste: Roll Call reports Congress appropriated $100 billion more for weapons systems than DoD requested over the last four years, citing a Taxpayer’s for Common Sense study. And this comes on the heels of Congress giving DoD a huge one-time $150 billion boost in Trump’s July 4th megabill.
(6) This Week’s Must Reads – from both sides of the aisle:
U.S. companies put brakes on hiring after Trump tariffs hit – Financial Times
American farmers are feeling the pain of Trump’s policies – Bloomberg
Why voters will feel the impact of GOP health cuts before the midterms – Politico
Pam Bondi needs a free speech tutorial – Wall Street Journal
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 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.
Cc