The Journal. - Why This Government Shutdown Is Different

Episode Date: October 1, 2025

Government funding lapsed early Wednesday morning after the White House and lawmakers failed to reach a spending deal, triggering a shutdown that is expected to halt some federal services and put hundreds of thousands of federal workers on furlough.​​ WSJ’s Natalie Andrews takes us inside the contentious dispute and explains why the gulf between Democrats and Republicans is wider than ever. Ryan Knutson hosts.Further Listening: - Inside DOGE's Campaign of Secrecy- DOGE: The Plan to Downsize the GovernmentSign up for WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

Lawmakers in Washington often threaten government shutdowns, and it feels like every year they get pretty close. But today, for the first time in six years, it actually happened. We start with the latest from the government's shutdown. The U.S. government is now officially shut down. The U.S. government officially shut down at midnight. The metro was noticeably quieter this morning, commuting to work. hundreds of thousands of people in the district

likely woke up to furlough notices with the shutdown and it seems like the area is quieter because of it. That's our colleague Natalie Andrews. We've had government shutdowns twice in this century, one in 2019 and one in 2013. But what makes this one different? This one is different primarily because lawmakers are really at a stalemate here

in a way that it doesn't seem like an easy off-ramp. And that's going to make it hard for any sort of real agreement or breakthrough. And there's one more thing making this shutdown different. A man named Russell Vote. Ross Vote, the head of the OMB, which manages the budget, has asked agencies to look at places where they could reduce the size of the federal government during a shutdown. Essentially fire people instead of just put people on furlough, that's never happened. In other words, there's a chance this shutdown could reshape the federal government for the long haul. Welcome to The Journal, our show about money, business, and power.

I'm Ryan Knutzen. It's Wednesday, October 1st. Coming up on the show, the government shutdown and what it means for the country. With Amex Platinum, you have access to over 1,400 airport lounges worldwide. So your experience before takeoff is a taste of what's to come. That's the powerful backing of Amex. Conditions apply. Does shutting down the federal government actually mean? It means that there is no longer a message from Congress and appropriations outlining how taxpayer dollars should be spent.

So the money is there. People have been paying their taxes. The money has been coming into the government. But the way the government works is that Congress has to decide that spending goes out. They control the purse. And so without any sort of directive to the federal government, saying how they should spend the money, the agencies cannot function, so they put people on furlough. Only essential employees are supposed to come into work, and they are working without pay. So there's still a giant pool of money inside the U.S. Treasury. It's just the instructions for where that money should go expired, basically. 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. Republicans right now control the White House and both chambers of Congress, the Senate and the House. So why do they even need Democrats? Because they don't have 60 votes in the Senate. Without 60 votes in the Senate, you can't pass legislation. Because Democrats could filibuster. 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. Congress was supposed to pass

a new spending bill by October 1st, 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? 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.

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. 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. So it takes two to tango, or in this case it takes two not to tango. Yes. The Democrats or Republicans are both digging in here.

What's the calculus for each side? 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 scoured for last time. So he is wanting to put up a fight. 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. Absolutely. They've seen their party be such a mess this year. The 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. 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. 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 a wide range of things that we just will see not happen. There will likely not be a jobs report this Friday. If it 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. 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. 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. How can that be the case? Like, why does the president's priorities get to be funded? 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. On the hill, the shutdown has become a blame game between Republicans and Democrats. Well, the Democrats want to shut it down, so when you shut it down, you have to do layoffs. So we'd be laying off. Republicans have failed to get enough votes to avoid a shutdown.

They've got to sit down and negotiate with Democrats. 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 are voting on the CR. Trump said yesterday that good things can come, from a shutdown? Yes. 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. What did he mean by that? He is referring to these reduction in force requests

that Russ vote, 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. The White House's plans for the shutdown, that's next. By the seven-time world's best leisure airline champions, Air Transat. All right, so remind us who Russell Vote is, the head of the Office of Management and Budget. Russ Vote is a longtime 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 Vaux 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. 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. There were also these recisions that vote 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 be not be spending money on this.

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? 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. So then here comes this government shutdown. How does that play into or work against Russ Votes vision? The shutdown in rest votes terms allows them to say, hey, these offices aren't receiving funding by Congress, let's cut them. But so in rest of plan is like, well, if there's no funding being, if Congress, 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. 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. Leading up to this shutdown, what steps did vote take to prepare for this moment?

Vote sent quite an explosive memo last week asking all agencies to identify where they could do reductions in force. They call them riffs. The memo went out to all federal agencies, so this was an all-government request by OMB to analyze where they could make cuts. OMB has not directed agencies to layoff workers yet, but they could start soon. In a call with House Republicans today, Vote 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 Republicans 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. 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 and Democrats have foisted upon the administration. The legality of the planned layoffs has been challenged by Democrats and unions who represent federal employees. In yesterday, Schumer criticized Trump for, quote, using Americans as political pawns. Democrats do not want a shutdown. We stand ready to work with Republicans to find a bipartisan compromise in the ball of. in their court. Have you talked to federal employees? How are they feeling?

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.

I wonder if something that someone might end up putting in the five things I did this week is get fired or furloughed. It could be. I mean, if you're operating, the weird thing about Washington is federal employees are everywhere. And so there was, you know, a few people in my workout class this morning that we're waking up to being furloughed. So do you think there's a chance that the U.S. government may pass its previous record of a 35-day shutdown, which happened in 2018? 18 into 2019? 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. 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? 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 the 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 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.

What does it say about the political moment that we're in right now? 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. All right, Natalie Andrews, time to shut down this interview. All right, let's do it. Hopefully not for a long time. 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.