WSJ What’s News: Government Shuts Down as Funding Lapses
Air Date: October 1, 2025
Host: Caitlin McCabe
Podcast: The Wall Street Journal – What’s News
Overview
This episode covers the first U.S. federal government shutdown in nearly seven years, breaking down its causes, immediate effects, and the political stalemate in Washington, D.C. The show also highlights a landmark First Amendment court ruling on campus protests, the end of a major U.S. trade program with Haiti, developments on labor force participation among older Americans, and significant news from the health and pharmaceutical sectors.
Key Discussion Points & Insights
1. Federal Government Shutdown: Causes and Political Battle
- Reason for Shutdown: Lawmakers failed to negotiate a spending agreement, causing funding for federal agencies to lapse just past midnight.
- “The US government is officially shut down after lawmakers fail to negotiate a spending agreement.”
— Caitlin McCabe [00:33]
- “The US government is officially shut down after lawmakers fail to negotiate a spending agreement.”
- Political Standoff:
- Democrats insisted on restoring hundreds of billions of dollars in healthcare funding.
- Republicans and the White House refused to accept the Democrats' conditions, pushing for cost cuts and lower spending.
- Competing Narratives:
- “Our position is a simple: cancel the cuts, lower the costs, save health care.”
— Chuck Schumer [00:39] - “No country can afford to pay for illegal immigration, healthcare for everybody...I have an obligation to not accept that.”
— Donald Trump [00:45]
- “Our position is a simple: cancel the cuts, lower the costs, save health care.”
- Shutdown’s Unique Character:
- Unlike prior shutdowns centered around specific bills, this one is “almost more philosophical,” with both sides using it as political leverage.
- “Democrats are trying to dig in their heels...the White House, however, feels like they’re winning this political debate and have almost no incentive to cut a deal.”
— Damian Paletta [01:55]
- “Democrats are trying to dig in their heels...the White House, however, feels like they’re winning this political debate and have almost no incentive to cut a deal.”
- Unlike prior shutdowns centered around specific bills, this one is “almost more philosophical,” with both sides using it as political leverage.
2. Immediate Impacts of Shutdown
- Agency Closures: Non-essential agencies halt operations.
- Impacted Services:
- No jobs report expected from the Labor Department.
- CDC to stop analyzing surveillance data for reportable diseases.
- “This Friday’s highly anticipated jobs report likely won’t be published...the CDC will stop analyzing surveillance data.”
— Caitlin McCabe [03:18]
- Federal Workers:
- Approximately 750,000 could be furloughed without pay.
- Potential Layoffs:
- The Trump administration has directed agencies to consider firing employees whose work doesn’t align with presidential priorities.
- “Because of the shutdown, we can do things medically and other ways, including benefits. We can cut large numbers of people out.”
— Donald Trump [04:02]
- “Because of the shutdown, we can do things medically and other ways, including benefits. We can cut large numbers of people out.”
- The Trump administration has directed agencies to consider firing employees whose work doesn’t align with presidential priorities.
3. The Political Blame Game
- Public Messaging:
- Federal agencies and the White House blamed Democrats via official communication and public banners.
- Democrats countered, pointing to Republican rejection of compromise proposals.
- “A few moments ago, Republicans once again rejected Democrats’ proposals to avoid a shutdown, fix health care premiums, and spare Americans the calamity of skyrocketing...health care costs.”
— Chuck Schumer [03:04]
- “A few moments ago, Republicans once again rejected Democrats’ proposals to avoid a shutdown, fix health care premiums, and spare Americans the calamity of skyrocketing...health care costs.”
- Outlook:
- House lawmakers not expected back in Washington until next week, dragging out the shutdown.
4. Landmark Ruling on Campus Protests & Deportation
- Court Decision:
- A federal judge ruled the Trump administration violated the First Amendment by deporting non-U.S. citizens for pro-Palestinian speech on college campuses.
- “If the First Amendment means anything, it’s that the government cannot imprison you because it doesn’t like the speech that you have engaged in.”
— Veronica Dagger quoting Ramya Krishnan, First Amendment Institute [07:27]
- “If the First Amendment means anything, it’s that the government cannot imprison you because it doesn’t like the speech that you have engaged in.”
- The administration says its approach will continue regardless.
- A federal judge ruled the Trump administration violated the First Amendment by deporting non-U.S. citizens for pro-Palestinian speech on college campuses.
5. U.S. Withdrawals: Haiti Trade Program Ends
- HOPE-HELP Act Expiry:
- The U.S. ends its duty-free program for Haiti’s garment industry, placing thousands of jobs at risk and likely exacerbating poverty and the refugee crisis amid worsening gang violence in Haiti.
6. White House & Harvard: Federal Funding Fight
- BLS Nomination:
- Withdrawal of the conservative economist E.J. Antony as BLS nominee leaves the agency leaderless.
- Harvard Negotiations:
- Trump administration and Harvard are close to a $500 million deal for Harvard to invest in trade schools, partially resolving disputes over anti-Semitism and diversity.
- “By opening up trade schools. This would be a giant trade school series of trade schools. It would be run by Harvard...”
— Donald Trump [06:16]
- “By opening up trade schools. This would be a giant trade school series of trade schools. It would be run by Harvard...”
- Trump administration and Harvard are close to a $500 million deal for Harvard to invest in trade schools, partially resolving disputes over anti-Semitism and diversity.
7. Trump Unveils 'Trump Rx' Prescription Drug Platform
- New Plan:
- Launch of a government-run website (Trump Rx) to buy prescription drugs directly from manufacturers.
- News caused a noticeable rally in European pharmaceutical stocks.
- Industry Impact:
- Could be a blueprint for wider pharma-government cooperation.
8. Aging Workforce in America
- Lots of Seniors Still Working:
- Almost 9% of Americans 75+ and over 25% of those 65–74 are employed or actively seeking work.
- Reasons for Delaying Retirement:
- Financial pressures, enjoyment of work, and increased living costs.
- “Some folks are taking a later retirement because they’re worried about money, but others simply love the work...prices have increased so much in recent years, and that’s stressing a lot of retirees out.”
— Veronica Dagger [09:43]
- “Some folks are taking a later retirement because they’re worried about money, but others simply love the work...prices have increased so much in recent years, and that’s stressing a lot of retirees out.”
- Financial pressures, enjoyment of work, and increased living costs.
- Benefits & Downsides:
- Delaying Social Security increases payout; continued income preserves savings and provides social connection.
- Could slow promotions and job openings for younger workers.
Notable Quotes & Memorable Moments
-
Political Stakes and Rhetoric:
- “The US government is officially shut down after lawmakers fail to negotiate a spending agreement.”
— Caitlin McCabe [00:33] - “They’re taking a risk by having a shutdown...We can cut large numbers of people out. We don’t want to do that, but we don’t want fraud, waste, and abuse.”
— Donald Trump [04:02]
- “The US government is officially shut down after lawmakers fail to negotiate a spending agreement.”
-
Judicial Rebuke:
- “If the First Amendment means anything, it’s that the government cannot imprison you because it doesn’t like the speech that you have engaged in.”
— Ramya Krishnan, via Veronica Dagger [07:27]
- “If the First Amendment means anything, it’s that the government cannot imprison you because it doesn’t like the speech that you have engaged in.”
-
Societal Snapshot:
- “People who work longer may be able to delay Social Security, which increases its payouts by up to 8% for every year they refrain from collecting...”
— Veronica Dagger [10:09]
- “People who work longer may be able to delay Social Security, which increases its payouts by up to 8% for every year they refrain from collecting...”
Important Timestamps
- 00:33: Government shutdown announced, competing political quotes
- 01:38: Economic and employment impacts described
- 02:01–02:33: Analysis: this shutdown is different, more philosophical
- 03:04–03:18: Schumer on why Democrats blocked the latest Republican proposal
- 04:02: Trump’s veiled threat about mass federal layoffs
- 06:16: Trump details the Harvard trade school deal
- 07:27: First Amendment Institute reacts to the court ruling on deportations
- 09:43–10:09: Veronica Dagger on delayed retirements and reasons
- 10:09: Benefits and downsides to later retirement
Conclusion
This episode provides a sharp, concise overview of critical U.S. political and economic developments as the government enters a new shutdown era. The reporting blends high-level policy analysis with real-world consequences–from federal furloughs to fundamental constitutional rights and global economic impacts. Listeners are left with a clear, nuanced understanding of the stakes and what may come next, both in Washington and beyond.