With a Deal Unlikely, Government Shutdown Looms

Summary

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WSJ What’s News: With a Deal Unlikely, Government Shutdown Looms

Date: September 30, 2025
Host: Alex Ossola

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Overview

This episode centers on the imminent threat of a U.S. federal government shutdown, its far-reaching effects across the public and private sectors, and notable business and policy headlines from Wall Street and Washington. Key guests include WSJ economics reporter Justin Lahart, national security correspondent Michael Gordon, and reporter Liz Essley White. The show also touches on developments in the pharmaceutical sector, EV tax credits, and a major AI infrastructure deal with Meta.

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Government Shutdown: Causes, Consequences & Political Dynamics

The Looming Shutdown

• [00:56] The government is “mere hours away from a shutdown,” with funding set to lapse just after midnight unless a stopgap spending bill is passed. Prospects for a deal are “increasingly remote.”
• President Trump signaled both a likelihood of shutdown (“could use a lapse in funding to flex his executive powers at Democrats’ expense”) and a degree of openness for negotiation on health care.

Impact on Federal Workers and the Economy

• Guest: Justin Lahart, WSJ Economics Reporter

  • Federal Employees:

    • “People think upwards of 800,000 workers would be furloughed so they wouldn't be working.” ([02:08])
    • The last (partial) shutdown was in 2018-2019: 350,000 furloughed; 2013’s was about 800,000.

  • Loss of Economic Data:

    • “The Bureau of Labor Statistics won't release or collect any economic data, which includes this Friday's jobs report.” ([02:36])
    • “When we have less economic data or we don't get to see economic data, we're flying blind. … For the Fed, it's harder for them to make a decision about rates.” ([02:49])

  • Private Sector Effects:

    • “There's a lot of government contract work that goes on so those folks won't be getting paid… The coffee shop federal employees go to… People who have businesses set up around national parks—well, national parks are closed…” ([03:14])

  • GDP & Economic Growth:

    • “When the government shuts down, it does shave some growth off. GDP does not grow as quickly… There is a rebound, but… there is some business that is lost forever.” ([03:39])

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National Security: Military Readiness and Political Overtones

Secretary Hegseth’s Address at Quantico

• [05:24] Defense Secretary Pete Hegseth held a “rah rah speech” at Quantico, focusing on toughening physical standards in the military even “if it means that women would be excluded from combat roles.”
• Hegseth “railed against diversity and inclusion.”
• Notably, President Trump attended and “gave a very striking speech about using the military potentially in American cities to quell disorder.” ([05:24])

Military Reaction

• Guest: Michael Gordon, WSJ National Security Correspondent
  • “The military was pretty stoical throughout. They're trained to be apolitical… There was occasionally some nervous laughter… The military is not comfortable with that. They're not really tuned to hear speeches in which one political leader assails another.” ([06:04])

Strategic Shifts Announced

• Increased use of National Guard and active duty military in American cities
• Growing military emphasis “in the Caribbean… partly directed in intimidating Venezuela and partly at drug traffickers”
• New defense strategy to “emphasize Western Hemisphere defense while still taking note of the challenge from China” ([06:39])

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Market & Business Updates

Stock Market Snapshot

• “A rally in pharmaceutical stocks helped lift major indexes today, overcoming worries about a government shutdown and new data pointing to a decline in consumer confidence.” ([04:05])
  • Dow: +0.2%
  • Nasdaq: +0.3%
  • S&P 500: +0.4%

Texas Stock Exchange

• SEC approved TEXI (Texas Stock Exchange) to operate, targeting New York’s dominance ([04:05])

ExxonMobil Job Cuts

• ExxonMobil to cut 2,000 jobs worldwide; almost half in Canada (at subsidiary Imperial Oil) ([04:05])

EV Tax Credits Expire

• The $7,500 electric vehicle tax credit expired last month.
  • Guest: John Murphy (Take on the Week excerpt):
    • EV sales peaked in anticipation, but “once that drops off, we're probably going to see something far below 10%... it's a subpar product at a higher price.” ([08:51])
    • “We are probably a very long way off from actually making that work.” ([09:13])

Corporate Moves

• Spotify: CEO Daniel Ek to step down, with Alex Norstrom & Gustav Soderstrom to become co-CEOs ([09:30])
• CoreWeave-Meta Deal: CoreWeave secures a contract with Meta worth up to $14.2 billion for AI cloud infrastructure ([09:30])
• OpenAI: Launches new social media app for its AI video generator; targets TikTok, YouTube, Meta ([09:30])

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Major Health Policy Developments

Trump Rx: The Government’s New Discount Medicine Site

• White House Announcement: New site for Americans to buy certain medications directly, at discounted rates negotiated by the government ([10:50])
• Guest: Liz Essley White, WSJ Reporter
  • Limited details: “Pfizer is committed to offering some of its drugs on the site,” many of which are already in its existing patient assistance program ([11:03]).
  • Most Americans already “have private insurance or are on Medicare or Medicaid… already getting some discount off the list price.”
  • Pfizer’s Role: “Pfizer is the first company to say we've made a deal with the Trump administration… They'll offer a most favored nation price… but exact details are confidential.” ([11:34])
  • What Pfizer Gets: “A three-year grace period, a reprieve from national security related tariffs… it won't be subject to what are called 232 tariffs.” ([12:09])
    • “Great for Pfizer, which has quite a large manufacturing footprint outside the United States.” ([12:13])

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Notable Quotes & Memorable Moments

• “We’re flying blind a little bit.” – Justin Lahart on the lack of economic data in a shutdown ([02:49])
• “The military is not comfortable with… speeches in which one political leader assails another.” – Michael Gordon ([06:04])
• “First and foremost... it's a subpar product at a higher price.” – John Murphy on EVs in the wake of tax credit expiration ([08:51])
• “Pfizer is the first company to say we've made a deal with the Trump administration… They'll offer a most favored nation price…” – Liz Essley White ([11:34])

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Timestamps for Important Segments

• [00:56] — Government shutdown update and political dynamics
• [02:08] — Federal worker furloughs explained
• [02:49] — Economic impacts: lack of data, GDP, private sector
• [05:24] — Secretary Hegseth’s address & Trump’s unprecedented speech to military
• [08:17] — Auto industry after EV tax credit expiration
• [09:30] — Big business headlines: Spotify, CoreWeave, OpenAI
• [10:50] — Launch of Trump Rx, government drug pricing deal

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This episode delivers a concise but comprehensive look at the potential government shutdown—its causes, cascading economic consequences, and the shifting sands of U.S. politics and industry as Washington’s paralysis looms.

Transcript

[A]

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[B]

With no deal in sight, the government heads towards a shutdown plus what Pfizer gets out of offering its drugs to Americans at a reduced rate.

[C]

So in exchange for continuing to invest in domestic manufacturing and making these other concessions, it won't be subject to what are called 232 tariffs. That'll be great for Pfizer, which has quite a large manufacturing footprint outside the United States.

[B]

And Coreweave secures a $14 billion with Meta it's Tuesday, September 30th. I'm Alex Osolleff for the Wall Street Journal. This is the PM edition of what's news, the top headlines and business stories that move the world today. The federal government appears to be mere hours away from a shutdown. Funding will lapse just after midnight tonight unless Congress passes a stopgap spending bill, which is an increasingly remote possibility. Speaking to reporters, President Trump said a shutdown was likely. He said he could use a lapse in funding to flex his executive powers at Democrats expense, while also signaling he could be open for more discussions regarding their health care demands. With just hours to go, Democrats leaned on Trump to rally Republicans behind some sort of deal. More votes were planned in the Senate today, but there was no sign of a late reprieve. For more about the impact of a potential shutdown, I'm joined by WSJ economics reporter Justin lehart. Justin Government workers themselves, I think, are the primary ones feeling the consequences. But how many of them would be furloughed as a result of the shutdown?

[D]

People think upwards of 800,000 workers would be furloughed so they wouldn't be working. The last shutdown was at the end of 2018 into 2019. Congress at that time had passed a variety of spending bills already, so it was a partial Shutdown. Something around 350,000 workers got furloughed in that one. The previous shutdown to that was in 2013, and that was about 800,000 as well.

[B]

As we mentioned on this morning's show, a shutdown means the Bureau of Labor Statistics won't release or collect any economic data, which includes this Friday's jobs report. What are the implications of having that not come out?

[D]

If you think of policymakers like at the Federal Reserve, investors, businesses, regular Americans, when we have less economic data or we don't get to see economic data, we're flying blind a little bit. If this was a prolonged shutdown, the Fed would be getting inflation data either it's harder for them to make a decision about rates.

[B]

For example, we don't often think of the private sector as being affected by a government shutdown, but it is, right?

[D]

Oh, yeah. There's a lot of government contract work that goes on so those folks won't be getting paid. And then you just think about other things. There's the coffee shop federal employees go to. They're not sending as much coffee. People who have businesses set up around national parks, well, national parks are closed, so you don't have that going on.

[B]

What does a government shutdown mean more broadly for economic growth?

[D]

When the government shuts down, it does shave some growth off. GDP does not grow as quickly. Now what happened after the shutdown is that there is a rebound, but there is some business that is lost forever. We end up with a somewhat smaller economy than we would have had.

[B]

That was WSJ economics reporter Justin lehart. Thank you, Justin.

[D]

Thanks.

[B]

A rally in pharmaceutical stocks helped lift major indexes today, overcoming worries about a government shutdown and new data pointing to a decline in consumer confidence. The dow rose about 0.2%, the Nasdaq added 0.3%, and the S&P 500 was up roughly 0.4%. Texas Stock Exchange, the Dallas based listing venue taking aim at New York's dominance is one step closer to being open for business. Today the securities and Exchange Commission approved Texy to operate as an exchange, paving the way for TEXI to start listing shares next year. And ExxonMobil announced today that it is slashing 2,000 jobs worldwide, according to a person familiar with the matter. None of those job cuts are in the US Almost half are in Canada. At Imperial Oil, majority owned by Exxon, the affiliate plans to reduce its workforce by 20% by the end of 2027. As we mentioned on this morning's show today, Defense Secretary Pete Hegseth addressed hundreds of top military officers at an extraordina meeting at the Marine Corps base in Quantico, Virginia. WSJ national security correspondent Michael Gordon joins me now from Washington. Michael, what were some of the main takeaways from Hegseth's address today?

[E]

It was kind of a rah rah speech where Secretary Heseth talked about how he wanted to strengthen standards largely for physical fitness within the military, even if it means that women would be excluded from combat roles. And he railed against diversity and inclusion, which had been familiar targets for him. One thing that was different was President Trump attended the meeting, which wasn't part of the original plan. And he gave a very striking speech about using the military potentially in American cities to quell disorder.

[B]

What were the reactions from the military personnel who were there? Were they surprised by any of this?

[E]

I think the military was pretty stoical throughout. They're trained to be apolitical. I know people who were in the room at the time and I've spoken with them and the ones that conveyed to me there was occasionally some nervous laughter. I think the attacks on President Biden and President Trump's speech, I think that the military is not comfortable with that. They're not really tuned to hear speeches in which one political leader assails another.

[B]

Did Trump or Hegseth signal or announce any strategic shifts in how the US military operates?

[E]

2 things have happened that the administration has been very direct and open about, but which are controversial within military circles within the Congress. One is the increasing use of the National Guard and even active duty military in American cities. And the other one is the role of the military in the Caribbean and including against drug boats. This emphasis on operations in the Caribbean, partly directed in intimidating Venezuela and partly directed at drug traffickers, is a new thing. There's a new national defense strategy which is expected to emphasize Western Hemisphere defense while still taking note of the challenge from China.

[B]

That was WSJ national security correspondent Michael Gordon. Thank you, Michael.

[E]

Thank you.

[B]

Coming up, what we know about the government's new direct to consumer site for buying medicine. That's after the break.

[F]

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[B]

Today, there's a big change for the autos industry. The $7,500 tax credit that buyers would get for purchasing a new electric vehicle has expired last month. EV sales were a bright spot in auto sales numbers with Toyota, Hyundai and Kia reporting double digit increases in August from a year earlier as consumers raced to take advantage of the credit. So what does it mean for these companies now that the credit is gone? John Murphy, managing director of Strategic advisory at Hague Partners, told our Take on the Week podcast where the auto industry goes from here.

[G]

It's a very big deal in many ways. First and foremost, when we look at EV penetration last year it was about 8%. First few months of this year ramped up because people were anticipating the end of these EV credits. But the reality is once that drops off, we're probably going to see something far below 10%, 8%, probably just a few percent because for a lot of folks in the country it's a subpar product at a higher price. Simply over time, if you can bring the cost of an EV down and ramp up the charging network and create a better product at a better price, I think people will move in that direction. But we have not gotten there yet in the auto industry in the United States and we are probably a very long way off from actually making that work.

[B]

To hear more, listen to the latest episode of Take on the Week. In other business news, Spotify CEO Daniel Ek said today that he plans to step away from the top job nearly two decades after he founded the music streaming company. Spotify's co presidents Alex Norstrom and Gustav Soderstrom will become co CEOs on January 1. Coreweave has secured a contract with Meta worth up to $14.2 billion to provide the social media company with artificial intelligence cloud infrastructure through 2031. The announcement follows multi billion dollar deals that CoreWeave has recently struck with OpenAI and Nvidia. And today OpenAI announced a new social media app for its AI video generator. Users can upload short clips of themselves and insert them into AI generated worlds describing the idea, style and scene they want to see. They can also connect with other users, watch and comment on their content with this app. OpenAI is facing off against TikTok, Google's YouTube and Meta as Silicon Valley ramps up its focus on AI video generation. Today the White House unveiled a direct to consumer website for Americans to buy medication. On the site, dubbed Trump Rx, people would pay cash for certain drugs directly at a discounted price negotiated by the government. Wall Street Journal reporter Liz ESLI White joins me now. Liz, what do we know about how the site would work and what kinds of drugs it would offer?

[C]

We don't know a ton about how the site would work. We know that Pfizer is committed to offering some of its drugs on the site and we do know that of the drugs that they are offering, some of Those are drugs that are already in their patient assistance program. And most Americans actually have private insurance or are on Medicare or Medicaid and so are already getting some discount off the list price of the drug.

[B]

You mentioned, Pfizer, which as part of the same announcement at the White House said it would offer some of its drugs at a reduced rate. What do we know about Pfizer and its commitment?

[C]

Pfizer is the first company to say we've made a deal with the Trump administration and here are all the different things that we're willing to do. One of them is they're going to offer some kind of most favored nation price which is somehow linked to what other countries pay. Those details aren't yet clear either to Medicaid. And they're going to offer all new drugs introduced into the United States at this most favored nation price as well. But the exact details Pfizer said were confidential.

[B]

And has the company gotten anything from the administration in return?

[C]

The company said that it got a three year grace period, a reprieve from national security related tariffs. So in exchange for continuing to invest in domestic manufacturing and making these other concessions, it won't be subject to what are called 232 tariffs. That'll be great for Pfizer, which has quite a large manufacturing footprint outside the United States.

[B]

That was WSJ reporter Liz Essley White. Thank you, Liz.

[C]

Thanks.

[B]

And that's what's news for this Tuesday afternoon. Today's show is produced by Pierre Bienname and Rodney Davis with supervising producer Jana Herron. I'm Alex Osola for the Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.