WSJ What’s News - Government Shuts Down as Funding Lapses

Episode Date: October 1, 2025

A.M. Edition for Oct. 01. The federal government has shut down for the first time in nearly seven years, after lawmakers failed to reach a deal that could keep the government funded. WSJ Washington coverage chief, Damien Paletta explains how this shutdown is different to previous ones. Plus, a federal judge rebukes the Trump administration’s efforts to deport pro-Palestisinian activists. And, the U.S. pulls the plug on a trade program that helped sustain Haiti’s last big industry. Caitlin McCabe hosts. Sign up for the WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

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government is officially shut down after lawmakers failed to negotiate a spending agreement opposition is a simple one cancel the cuts lower the costs save health care this country no country can afford to pay for illegal immigration health care

for everybody that comes into the country and that's what they're insisting and obviously I have an obligation to not I accept that. Plus, a federal judge rules the Trump administration violated the first amendment by targeting students in pro-Palestinian campus protests. And the U.S. pulls the plug on a trade program that helped keep impoverished Haiti afloat. It's Wednesday, October 1st. I'm Caitlin McCabe for the Wall Street Journal, and here's the AM edition of What's News, the top headlines and business stories moving your world today. Washington, D.C. has gone.

dark, at least for some non-essential government agencies. The federal government shut down for the first time in nearly seven years just past midnight this morning after lawmakers couldn't reach a deal to keep the government funded. In the past few days, the White House of Democrats made no real effort to reach a compromise. So here we are. Funding has lapsed. Many government programs are going to cease. Hundreds of thousands of federal workers will likely be put on furlough, unpaid leave, and an uncertain economic and political moment has arrived. That's the journal. Washington coverage chief, Damien Palletta, he says the shutdown feels different than previous ones. Usually a shutdown is about a specific bill or a specific policy that both sides dig in on.

This shutdown is almost more philosophical. Democrats are trying to dig in their heels. They feel like they've been pushed around by the White House for months, and they see this as a rare opportunity to try to push back and create some obstruction. The White House, however, feels like they're winning this political debate and have almost no incentive to cut a deal with Democrats. President Trump likes being the one who's kind of pushing and in charge, and by making Democrats look weak and actually helps him in his agenda going forward. Both sides quickly pointed fingers at each other. Federal agencies sent emails to workers blaming Democrats, while a banner across the White

House read, quote, Democrats have shut down the government. Republicans have blamed Democrats for not supporting a stopgap bill that would fund the government through late November. Democrats, however, remained united in saying they wouldn't vote for any bill that didn't include the restoration of hundreds of billions of dollars of health care funding. Here's Democratic Senate Minority Leader Chuck Schumer speaking shortly before the shutdown began. A few moments ago, Republicans once again rejected Democrat's proposals to avoid a shutdown, fix health care premiums, and spare Americans the calamity of skyrocketing through the roof

health care costs. What happens now isn't entirely clear. We do know some agencies will grind to a halt. This Friday's highly anticipated jobs report likely won't be published by the Labor Department, and the Centers for Disease Control and Prevention will stop analyzing surveillance data for reportable diseases. The Congressional Budget Office estimated that about 750,000 federal employees could be furloughed, during which they won't receive pay. One of the biggest unknowns, however, is whether the Trump administration will move to permanently fire federal workers. The Office of Management and Budget has asked agencies to consider firing employees whose work doesn't align with the president's priorities.

President Trump reiterated that idea yesterday in a veiled threat to Democrats. So they're taking a risk by having a shutdown because because of the shutdown, we can do things medically and other ways, including benefits. We can cut large numbers of people. We don't want to do that, but we don't want fraud, waste, and abuse. The fallout from the shutdown will likely depend on its length and scale. but any resolution could be at least several days away. House lawmakers aren't expected to return to Washington until next week, and any compromise funding proposal would need their approval.

Coming up, the rest of the day's news, including a key ruling on whether the Trump administration's deportation policies are in breach of the First Amendment. That story and more after the break. The Bureau of Labor Statistics is still without a leader after the White House has withdrawn its nomination of conservative economist E.J. Antony. The agency has been left without a head since August after Trump fired the previous BLS leader. The reason for the decision remains unclear, but a White House official praised Antony and said the president will soon nominate a new candidate to lead the BLS. Antony did not immediately respond to a request for comment. Staying with the White House official, praised Antony and said the president. we reported yesterday how the Trump administration was escalating its fight with Harvard University by starting a process that could strip the Ivy League School of federal funding. But now, President Trump has said his administration is nearing a $500 million deal with the university. Speaking to reporters in the Oval Office, Trump said the proposed deal would involve Harvard investing in trade schools and focusing on AI and other vocational training.

By opening up trade school, this would be a giant trade school series of trade schools. It would be run by Harvard. This is something that we're close to finalizing. We haven't done it yet. But they put up $500 million interest and everything else would go to that account, meaning go to the trade school. And, you know, it's a big investment in trade school done by very smart people. And then their sins are forgiven.

It comes as Harvard University and the Trump administration have been locked for months in a battle over allegations of anti-Semitism and concerns about diversity practices. Harvard didn't immediately respond to a request for comment. And a federal judge has found the Trump administration violated the Constitution when it targeted non-U.S. citizens for deportation solely for supporting Palestinians and criticizing Israel. In a scathing ruling, U.S. District Judge William Young agreed with several university associations that what they called an ideological deportation policy violated free speech protections guaranteed by the First Amendment. Ramya Krishnan is a senior staff attorney at the First Amendment Institute, which represented the plaintiffs. Historic ruling that should have immediate implications for the Trump administration's policies. 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.

A State Department spokesman said the administration's approach was well-founded and would continue. For two decades, the U.S. has thrown Haiti an economic lifeline, letting its garment industry export clothes to America duty-free. That ended at midnight. The end of the Hope Slash Help Act will impact what's left of the impoverished Caribbean nation's largest industry, putting thousands of jobs at risk in factories that produce clothing for brands, including Haynes, Calvin Klein, Gap, and Victoria. secret. U.S. lawmakers and Haitian businesses warned that without those jobs, poverty will deepen in Haiti, exacerbating a hunger and refugee crisis as gangs have all but taken control of the country's capital. And European pharmaceutical stocks are trading sharply higher after President Trump yesterday unveiled plans to launch a government-run website dubbed Trump RX for consumers to buy drugs directly from manufacturers. The stocks, Europe's 600 Health Care Index, rose more than 3 percent,

with Roche, Sanofi, and Novo Nordisk leading the gains. While Tuesday's announcement was specific to drugs from Pfizer, analysts at Jeffrey say it may represent a blueprint for broader cooperation between the pharma industry and the Trump administration, helping boost shares this morning. And finally, Americans' lifespans are getting longer. And, as it turns out, so are many of their careers. Almost 9% of Americans aged 75 and older were working or looking for work last year,

according to the Bureau of Labor Statistics. The same trend applies to a slightly younger cohort of Americans, too, with over a quarter of those between the ages of 65 and 74 also participating in last year's workforce. Personal finance reporter Veronica Dagger says there are plenty of reasons why people delay retirement. Some folks are taking a later retirement because they're worried about. money, but others simply love the work. Financial worries are, of course, a big part of the reason

for some. And of course, prices have increased so much in recent years, and that's stressing a lot of retirees out. But Veronica says those who do retire later tend to enjoy a broad array of benefits, too. 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 a check between the ages of 62 and 70. Continuing to earn income means a person draws less from their savings, which helps them preserve more money for later in life or for their heirs, assets to compound, the risk of outliving one's money. And enjoying work provides a social contact and mental and physical stimulation often, which

is crucial for your overall health. On the flip side, when older workers remain in their positions, they may slow the pace of promotions and limit high-level job openings for younger generations. And that's it for What's News for this Tuesday morning. Today's show is produced by Kate Bullivant and Rema McKenna. Our supervising producer is Sandra Kilhoff. And I'm Caitlin McCabe for The Wall Street Journal. We'll be back tonight with the new show. Until then, Thanks for listening.