Ryan Knudsen (2:54)

So there's still a giant pool of money inside the US Treasury. It's just the instructions for where that money should go. Expired, Basically.

Natalie Andrews (3:03)

Yeah, this is one of those Schoolhouse Rock checks and balances. The money comes into the Treasury, Congress gets to decide how it's spent.

Ryan Knudsen (3:12)

Republicans right now control the White House and both chambers of Congress, the Senate and the House. So why do they even need Democrats.

Natalie Andrews (3:20)

Because they don't have 60 votes in the Senate. Without 60 votes in the Senate, you.

Ryan Knudsen (3:25)

Can'T pass legislation because Democrats could Filibuster.

Natalie Andrews (3:28)

Yeah, it's the legislative filibuster. Both parties have support to essentially get rid of it for this very reason. At some point when you try to pass legislation, you get frustrated because you have to be bipartisan. Now, a lot of members of the Senate will tell you that that's what keeps the Senate functioning because they do need to reach across the aisle and come together. It's just hard when it hits situations like this where the parties are digging in.

Ryan Knudsen (3:55)

Congress was supposed to pass a new spending bill by October 1, outlining how the government will allocate money in the new fiscal year. Republicans have pushed for a seven week stopgap bill to extend the current budget, arguing that it would give both sides more time to come up with a spending deal. And so why aren't Democrats agreeing to that?

Natalie Andrews (4:14)

Democrats rarely, if you're the party in the minority, have leverage. This is a moment where they have leverage. And so they are using it. They are saying they don't like how Republicans have cut Medicare with the tax bill. They don't like how they've seen cuts or changes to the health care system. And so they're dug in. They're saying, no, we would like 1.5 trillion in health care spending or we want promises that that can happen. And they've especially focused on these enhanced subsidies from the Affordable Care act that were enhanced during the pandemic. Basically, more money was given to government health care and they want those to be restored. They expire at the end of this year.

Ryan Knudsen (4:56)

Once those subsidies expire, over 4 million Americans could become uninsured, according to the Congressional Budget Office. Natalie says the gap between Republicans and Democrats is in some ways philosophical rather than a fight over one specific issue.

Natalie Andrews (5:13)

In the past, people remember ted Cruz in 2013 really wanting to block the Affordable Care Act. Eventually he was overruled. But there was a shutdown in the meantime. And in 2018, going into 2019, the issue was immigration funding and the border wall. Donald Trump wanted more money for the border. In this case, they were just trying to get a short term stopgap spending bill to November done, and they couldn't even get that.

Ryan Knudsen (5:45)

So it takes two to tango. Or in this case, it takes two not to tango. But Democrats and Republicans are both digging in here. What's the calculus for each side?

Natalie Andrews (5:58)

And that's the thing. There are real politics at play. And you can't Ignore that. Chuck Schumer was raked over the coals by his own party in March when he voted to keep the government open. He enjoys his place leading the Senate for Democrats. He doesn't want to see that put at risk. But if you lose your base, you're in trouble. Right. And so Chuck Schumer's making a decision here that he got skewered for last time. So he is wanting to put up a fight.

Ryan Knudsen (6:27)

So it's sort of a political calculation on Chuck Schumer's part, the Senate minority leader, that he thinks Democratic voters want to see Democrats stand up and fight.

Natalie Andrews (6:36)

Absolutely. They've seen their party be such a mess this year. The Democratic Democratic Party is struggling with how to push back against Donald Trump. And this is their moment of leverage. And they are making a decision that this is what their base wants.

Ryan Knudsen (6:54)

So let's talk a little bit more about the impact of this and what areas of the government will stop functioning, really all over.

Natalie Andrews (7:02)

If you interact with a government agency, you could expect it to take longer. There's going to be fewer people at work. But there's also, like, a wide range of things that we just will see not happen. There will likely not be a jobs report this Friday if that continues. We know that the Bureau of Labor and Statistics has said that they're not accumulating data, but it's already a wobbly job market, and now we won't have data to know just how wobbly.

Ryan Knudsen (7:33)

The lack of a jobs report could present a problem for the Federal Reserve, which is trying to fight off stubborn inflation without hurting an already weakening job market. So at least for now, the Fed might be flying a little bit blind. Beyond the job numbers, the impacts could be far ranging, especially if the shutdown drags on.

Natalie Andrews (7:52)

We don't have updates from every single agency, but we do know that the president's priorities take priority. So we may not see cuts from places like immigration or, you know, the doj. We're still reporting a lot of what's happening now that the shutdown is actually in place.

Ryan Knudsen (8:12)

How can that be the case? Like, why does the president's priorities get to be funded?

Natalie Andrews (8:17)

Because the administration gets to decide what is essential here. And we know Donald Trump feels like public safety and cracking down on crime is essential.

Ryan Knudsen (8:28)

On the Hill, the shutdown has become a blame game between Republicans and Democrats.

Republican Representative (8:32)

Well, the Democrats want to shut it down. So when you shut it down, you have to do layoffs. So we'd be laying.

Democratic Representative (8:38)

Republicans have failed to get enough votes to avoid a shutdown They've got to sit down and negotiate with Democrats.

Natalie Andrews (8:46)

Outside of Mike Johnson's office in the Capitol and also at the White House, the administration is playing videos of Democrats saying the shutdowns are so bad when they were on the other side of things and Republicans were threatening a shutdown. So they're kind of doing like a greatest hits of Democrats. And then Democrats are doing tiktoks and videos saying where Republicans. They've left town, especially on the House side, because they didn't come back to Washington this week and they are saying that Republicans want to cut your health care and that's why they're voting on the cr.

Ryan Knudsen (9:23)

Trump said yesterday that good things can come from a shutdown.

Natalie Andrews (9:27)

Yes.

Republican Representative (9:27)

And so we're doing well as a country. So the last thing we want to do is shut it down. But a lot of good can come down from shutdowns. We can get rid of a lot of things that we didn't want and they'd be Democrat things, but they want open borders.

Ryan Knudsen (9:42)

What, what did he mean by that?

Natalie Andrews (9:45)

He is referring to these reduction in force requests that Russ Vogt, the head of OMB has sent to agencies. This is what makes the shutdown so different. The White House is seeing this as an opportunity.

Ryan Knudsen (10:00)

The White House's plans for the shutdown, that's next. All right, so remind us who Russell Vogt is. The head of the Office of Management and Budget.

Natalie Andrews (10:21)

Russ Vogt is a long time conservative voice on limiting the size of government. He served in the first Trump administration. He helped with the Project 2025 plan that listeners may have heard about. Russ Fot would like to see a smaller federal government. He really subscribes to the conservative views that a larger bureaucracy is not good for the future of the country. And he would like to trim it down.

Ryan Knudsen (10:55)

Trimming back the federal government has been a cornerstone of the Trump administration. And it goes beyond just the cuts that were made earlier this year by the Department of Government Efficiency, or doge.

Natalie Andrews (11:05)

There were also these rescissions that Vogt stepped into where he asked Congress to pull back the money that had been appropriated. Congress has authorized this money. The most notable was National Public Radio and Public Broadcasting where he said the government should not be spending money on this.

Ryan Knudsen (11:23)

And so essentially Congress has been saying we've passed these bills that appropriate the way tax dollars ought to be spent. And the Trump administration and Russ Vote in particular is saying, yeah, we don't want that money. Actually, we don't want to spend that money. You can take it back.

Natalie Andrews (11:39)

Yeah, take this money back, put it in the treasury, pay down the debt, whatever you want to do, but we're not going to spend it.

Ryan Knudsen (11:45)

So then here comes this government shutdown. How does that play into or work against Russ Votes vision?

Natalie Andrews (11:53)

The shutdown in Russ Votes terms allows them to say, hey, these offices aren't receiving funding by Congress, let's cut them.

Ryan Knudsen (12:03)

But so in Russvo's sort of plan is like, well, if there's no funding being, if Congress is not telling us how to spend the money, we can just go ahead and eliminate these areas of government that we don't like.

Natalie Andrews (12:15)

Yeah, essentially it will be argued about, surely. But if Congress hasn't appropriated the money, then these people are operating without furlough. And if they don't fit the president's priorities, maybe they shouldn't have a job anyway.

Ryan Knudsen (12:30)

Leading up to this shutdown, what steps did Vogt take to prepare for this moment?

Natalie Andrews (12:37)

Vote sent quite an explosive memo last week asking all agencies to identify where they could do reductions in force. They call them RIFs. The memo went out to all federal agencies. So this was an all government request by OMB to analyze where they could make cuts.

Ryan Knudsen (13:00)

OMB has not directed agencies to layoff workers yet, but they could start soon. In a call with House Republicans today, Vogt said layoffs will begin later this week. That's according to participants on the call. Vote didn't specify how many cuts there will be, but one House Republican said he indicated it would be, quote, consequential. In a press conference earlier Today, Vice President J.D. vance said the administration was considering layoffs to protect funding for essential services.

Vice President J.D. Vance (13:27)

But let's be honest, if this thing drags on for another few days or, God forbid, another few weeks, we are going to have to lay people off. We're going to have to save money in some places so the essential services don't get turned off in other places. That is the reality of the government shutdown that Chuck Schumer, the Democrats, have foisted upon the administration.

Ryan Knudsen (13:45)

The legality of the planned layoffs has been challenged by Democrats and unions who represent federal employees. And yesterday Schumer criticized Trump for, quote, using Americans as political pawns.

Democratic Representative (13:56)

Democrats do not want a shutdown. Stand ready to work with Republicans to find a bipartisan compromise. And the ball's in their court.

Ryan Knudsen (14:05)

Have you talked to federal employees? How are they feeling?

Natalie Andrews (14:09)

They're stressed. It is a tough time to be a federal employee. And I think that's not a partisan thing to say. It's a time when some of them are still being asked to send in five things from what they did each week, which Elon Musk required, started requiring the beginning of the administration. They don't know if they're going to be put on some sort of cut in the previous. And now most federal employees are furloughed.

Ryan Knudsen (14:34)

I wonder if something that someone might end up putting in the five things I did this week is get fired or furloughed.

Natalie Andrews (14:42)

It could be. I mean, if you're operating. The weird thing about Washington is federal employees are everywhere. And so there was a few people in my workout class this morning that we're waking up to being furloughed.

Ryan Knudsen (14:56)

So do you think there's a chance that the US government may pass its previous record of a 35 day shutdown, which happened in 2018 into 2019?

Natalie Andrews (15:06)

There were several lawmakers on the Hill last night as the government was beginning to shut down. That signaled that they thought it could take a long time.

Ryan Knudsen (15:16)

Both sides are obviously blaming the other. But politically speaking, who do you think has a better chance of weathering the fallout from the shutdown?

Natalie Andrews (15:24)

I mean, shutdowns historically have had no real political effect. Voters tend to forget, although, you know, consistently they rate Congress as ineffective. They have low faith in their federal government. A shutdown is not going to help bring that rating up. It's not going to help build faith in how your member of Congress is working for you. And it'll depend, it depends on how this is carried out. It depends on who wins the messaging war, things like that. I mean, one thing that's really unique about this shutdown is that the emails that have been going out from various federal agencies such as Veterans affairs, when they sent their message out saying what services were being halted, they blamed it on the Democrats. So Republicans, just in the way that they've united around Donald Trump, they've learned how you really unite around a message and a short message. And they it is easier to just point fingers at Democrats than it is for Democrats to say, well, hey, there's these extended ACA subsidies that are going to expire and Republicans agree with us on wanting to renew this, or at least some do, and we want to hold out until we can get all Republicans or enough Republicans to agree with us. Like that's a harder thing to just message on and we'll have to see who wins.

Ryan Knudsen (16:47)

What does it say about the political moment that we're in right now?

Natalie Andrews (16:50)

This just highlights how ineffective Congress has become. I hate to sound negative. There are a lot of members of Congress, most members of Congress that earnestly want to improve the world, but there is not enough bipartisan agreement to do it. They can't even keep the lights on.

Ryan Knudsen (17:07)

All right, Natalie Andrews, time to shut down this interview.

Natalie Andrews (17:10)

All right, let's do it. Hopefully not for a long time.

Ryan Knudsen (17:31)

That's all for today. Wednesday, October 1st. The Journal is a co production of Spotify and the Wall Street Journal. Additional reporting in this episode by Lindsay Ellis. Thanks for listening. See you tomorrow.