Balance of Power: Weekly Washington Policy Pulse – October 6, 2025

Podcast: Balance of Power
Host: Bloomberg (Joe Mathieu)
Lead Analyst: Nathan Dean (Bloomberg Intelligence)
Panelists: Anna Wong (Bloomberg Economics), Duane Wright (Bloomberg Intelligence), Chris LeSueur (Geoeconomics, Bloomberg Economics), Derek Brower (Bloomberg NEF)

Episode Overview

This special edition of the Washington Policy Pulse dives into the ongoing U.S. government shutdown, its impacts across economics, healthcare, statecraft, and energy policy. Host Joe Mathieu orchestrates a panel of Bloomberg’s top policy and economics specialists, led by Nathan Dean, to unpack immediate and potential implications, from GDP disruptions to canceled infrastructure grants, with a focus on real-time, actionable insights for policy watchers and investors.

Key Discussion Points and Insights

1. Status of the Government Shutdown

(Nathan Dean, 01:09 - 04:29)

• No new negotiations: Minimal talks over the weekend between Senate lawmakers.
• House Republicans on hold: Speaker Mike Johnson instructs Republicans to stay away from D.C. until Senate Democrats agree to the proposed stopgap solution (to Nov. 20).
• Both parties claim advantage: Polls suggest both Democrats and Republicans feel politically insulated, delaying meaningful progress.
• Important dates:
  • Federal employees’ paycheck: October 10
  • Military payday: October 15
• Practical advice: Essential services like TSA will continue, but workers may become disgruntled without pay.

"Shutdowns aren't about winning, it's about who's losing less."
— Nathan Dean (03:14)

2. Economic Impact and Data Challenges

(Anna Wong, 04:29 - 12:08)

• GDP effect:
  • Rule of thumb: Every week of shutdown shaves off 0.2 percentage points from real annualized GDP for the quarter.
  • Loss is recuperated if shutdown is brief, but a prolonged shutdown (past mid-November) means not all lost GDP can be recovered.
• Labor market statistics:
  • Furloughed government workers still counted as employed in nonfarm payrolls; however, collateral job losses (e.g., food vendors) could show up in leisure/hospitality data.
  • If shutdown persists through Oct. 12–18 (household survey week), unemployment rate will spike.
• Data collection at risk:
  • If the Bureau of Labor Statistics (BLS) can’t perform surveys, critical data like nonfarm payroll and CPI will be disrupted.
  • The October CPI is crucial for Social Security cost-of-living adjustments (COLA).
• Data workaround strategies:
  • Leveraging state-level jobless claims, third-party payroll data, and approximately 20 million online prices to estimate inflation in the absence of official statistics.

"The significance of the October CPI collection being disrupted cannot be overstated because this is actually the month that would determine the cost of living adjustment for Social Security."
— Anna Wong (08:29)

3. Healthcare Focus: Obamacare Subsidies Debate

(Duane Wright, 12:44 - 17:28)

• COVID-era ACA subsidy expansion:
  • Enhanced subsidies for low/middle-income Americans, leading to record enrollment (~24 million).
• Political standoff:
  • GOP seeking to claw back costs: "Republicans see subsidies as bloated and not well-targeted," but are aware of rising support for the subsidies, even among Republican voters.
  • Democrats want a long-term extension; Republicans may only accept a short, less-generous extension.
• Likely compromise:
  • Most probable: a two-year extension with reduced benefits for higher earners.
• Timeframe expectation:
  • Protracted negotiations likely: shutdown could stretch “another week.”

"The outlines of a compromise are there where you can say, okay, if you're making over 400% of poverty, you either get no subsidy or a less generous subsidy… That’s probably where we're headed."
— Duane Wright (15:46)

4. Econ Statecraft & National Security Tools Amid Shutdown

(Chris LeSueur, 17:57 - 22:03)

• Trade investigations:
  • Most national security-related trade actions (e.g., semiconductors, minerals) to continue.
  • Delays expected for some anti-dumping/countervailing duty investigations.
• Export controls:
  • Recent Treasury-style approach expands the number of sanctioned entities dramatically.
  • Licensing for non-urgent exports may slow.
• CFIUS (foreign investment reviews):
  • Reviews will be delayed, as statutory deadlines are tolled.
• Development finance:
  • DFC is furloughing two-thirds of staff, pausing new deals but fulfilling existing obligations.
• DoD investment flexibility:
  • Some critical national security investments continue.
• Bottom line: National security tools keep functioning but with slowdowns in non-essential areas. Backlogs likely if shutdown drags on.

"The longer the shutdown lasts, the more impactful this will be...Where we will see some slowdown at Treasury is on CFIUS."
— Chris LeSueur (19:49)

5. Clean Energy, Infrastructure Grants & Shutdown Fallout

(Derek Brower, 23:11 - 28:08)

• Targeted grant cancellations:
  • $8 billion in energy/clean tech grants recently canceled, mostly targeting projects in Democratic states.
  • Some cancellations precede the shutdown, part of broader GOP strategy.
• Political dynamics:
  • Democrats highlight GOP-affected districts; real leverage appears limited as some projects were already on the chopping block.
  • Legal battles are arising — some judges pressing cases ahead despite government lawyers unavailable due to shutdown.
• Operational impacts:
  • DOE/EPA: only a few days left of funding; up to 90% of EPA staff may be furloughed, complicating both deregulatory and regulatory actions.
  • Infrastructure permitting remains in limbo, harming prospects for longer-term reforms and stability in federal investment incentives.

"The regulatory environment for infrastructure investments remains wildly uncertain."
— Derek Brower (27:10)

6. Farm Aid in the Pipeline

(Nathan Dean, 28:24)

• Upcoming farm aid announcement:
  • Secretary Bessant may announce a new aid package soon, potentially $10 billion, with Republican discussions reaching up to $50 billion.
• Historical context:
  • Compares to $23 billion in aid during the first Trump administration.

Notable Quotes & Memorable Moments

| Timestamp | Speaker | Quote | |-----------|----------------|----------------------------------------------------------------------------------------------------| | 03:14 | Nathan Dean | "Shutdowns aren't about winning, it's about who's losing less." | | 08:29 | Anna Wong | "The significance of the October CPI collection being disrupted cannot be overstated because this is actually the month that would determine the cost of living adjustment for Social Security." | | 15:46 | Duane Wright | "The outlines of a compromise are there where... if you're making over 400% of poverty, you either get no subsidy or less generous subsidy... That's probably where we're headed." | | 19:49 | Chris LeSueur | "The longer the shutdown lasts, the more impactful this will be... Where we will see some slowdown at Treasury is on CFIUS." | | 27:10 | Derek Brower | "The regulatory environment for infrastructure investments remains wildly uncertain." |

Segment Timestamps

• 01:09 – 04:29: Overview of Shutdown Status, Politics, and Practical Impacts (Nathan Dean)
• 04:29 – 12:08: Economic Ramifications: GDP, Jobs, Data Gaps (Anna Wong)
• 12:44 – 17:28: Obamacare Subsidies Debate and Shutdown Politics (Duane Wright)
• 17:57 – 22:03: Shutdown Effects on Trade, Statecraft, and National Security Tools (Chris LeSueur)
• 23:11 – 28:08: Clean Energy Grants, Infrastructure, Political & Legal Fallout (Derek Brower)
• 28:24 – 29:14: Anticipated Farm Aid Announcement; Conclusion and Resources (Nathan Dean)

Resource Recommendations

• Bloomberg Terminal users can access panelists’ latest research directly (search analyst names or product codes as noted)
• For geoeconomics updates: subscribe via "geoecon" on the Terminal
• Clean energy analysis: "BNEFGO" or "NEFW" on the Terminal for Bloomberg NEF research

This episode is a must-listen for anyone following the shutdown’s economic, policy, and political fallout—packed with actionable analysis, forecasts, and a candid look at how the Beltway is grappling with a stubborn impasse.