WSJ What’s News - Trump Signals Openness to Healthcare Talks to End Shutdown

Episode Date: October 7, 2025

A.M. Edition for Oct. 7. Trump suggests he is open to talks on healthcare, signaling that there may be a way to break the impasse on the government shutdown. Negotiations over a ceasefire in Gaza continue in Egypt two years on from the deadly Hamas attacks that started the conflict. And big banks are competing for Trump's favor to be part of the Fannie and Freddie mega IPO. WSJ’s Ben Dummett explains how CEOs of the country’s six largest banks are navigating some novel hurdles in the process. Caitlin McCabe hosts.  Sign up for the WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

When you're with Amex Platinum, you get access to exclusive dining experiences and an annual travel credit. So the best tapas in town might be in a new town altogether. That's the powerful backing of Amex. Terms and conditions apply. Learn more at Amex.ca. president trump shows some openness to health care talks with democrats as the government shutdown drags on plus how the government's immigration push is diverting u.S. agents away from drug, money, and sex

crime cases. And America's top bankers tried to woo the administration to be part of the Fannie and Freddie mega IPO. First and foremost, they're just trying to navigate Trump. They're tiptoeing around him and his officials because they don't want to fall out of his good graces. It's Tuesday, October 7th. I'm Caitlin McCabe for the Wall Street Journal, and here is the AM edition of What's News, the top headlines and business stories moving your world today. Almost a week has passed since the U.S. government shutdown started, and discussions in Washington are still just plotting along. Yesterday, President Trump, speaking in the Oval Office, signaled a willingness to strike a deal.

We are speaking with the Democrats and some very good things could happen with respect to health care. Before later, clarifying that the government must first reopen before he will work with Democrats. In a social media post late last night, Trump again blamed Democrats for the shutdown and insisted they should reopen the government, quote, tonight. Health care has become a central sticking point in the shutdown, with Republicans insisting the government must first, reopened before discussing the expansion of Affordable Care Act subsidies. Democrats, however, are wanting those discussions to come first. With both sides dug in, a deal to reopen the government remains at a standstill, as evidenced yesterday when a fresh run of votes in the Senate failed. Democratic House Minority Leader Hakeem Jeffrey said yesterday that Democrats would, quote,

sit down any time, any place with Republicans to work at a deal. But he cast doubt on the president's claims that negotiations are underway. Leader Schumer, I believe, has put a state out in response indicating he's had no conversations with Donald Trump or the administration. And that's certainly been the case relative to us as House Democrats. That said, we're open. We've been calling for bipartisan conversations to address the Republican health care crisis. Lawmakers and White House officials expect that pressure to end the shutdown will keep building. Already, hundreds of thousands of federal workers have been furloughed while others are working without pay. October, federal workers, including members of the military, will start missing paychecks.

But pressure is showing up in other ways, too. Last week after the shutdown started, the Trump administration said it was withholding a combined $20 billion in infrastructure funds in New York City and Chicago. Here's Wall Street Journal reporter Joseph de Abilah. The Trump administration has blamed the Democrats for the shutdown, and they appear to be using this funding for transportation projects as a point of leverage over. blue states and states where there are leaders that are part of the ongoing budget negotiations. Senator Chuck Schumer in New York, of course, is one of the major players in these discussions

and withholding funding from major projects in New York State is obviously a point where he's going to get involved. Joseph notes that Democrats have responded by saying the Trump administration doesn't have the authority to withhold these funds that have already been appropriated by Congress. President Trump's immigration push is diverting thousands of federal agents to immigration enforcement from investigating drug smuggling, sexual exploitation, and organized crime. It comes as the administration works to meet its goal of removing 3,000 migrants a day, who are in the country illegally. The change is reverberating across the federal law enforcement system, with federal

referrals for prosecution falling across agencies. The Drug Enforcement Administration referred 10 percent fewer cases between May and June, and the U.S. Marshal Service reported a nearly 13 percent drop. The Trump administration defends the pivot with White House spokeswoman Abigail Jackson, saying the immigration enforcement is central to public safety. And today marks two years since the deadly Hamas attacks that sparked conflict across the Middle East and an Israeli assault on Gaza. That, according to local authorities, has led to deaths of more than 67,000 Palestinians. Peace negotiations are entering their second day in Cairo, Egypt, and could pave the way for a ceasefire in Gaza and the release of hostages.

The loftier aim is achieving a longer-term agreement for Israel to withdraw to agreed upon lines and for the creation of a Palestinian technocratic leadership in Gaza. In the two years since the October 7th attacks, Israel's military has won a series of victories against its regional foes, decimating Hamas and Lebanon's Hezbollah and severely damaging Iran's military leadership, missile and nuclear programs. It has also seen the collapse of the Assad regime in Syria. But the scale and ferocity of Israel's offensives have left it at risk of losing the long-term Western support that has been vital to its survival. Coming up, big banks are wooing the Trump administration to be part of the Fannie Mae and Freddie Mac mega deal that could be the largest IPO in history.

Plus, a major fire at an aluminum plant spells major disruption for Ford. Those stories and more after the break. Wall Street's biggest banks are vying for a piece of what could be the biggest initial public offering in history, the public debut of mortgage giants, Fannie Mae and Freddie Mac. Fannie and Freddie, as they are known, have been under government control since the 2008 financial crisis. Now, the Trump administration is preparing a stock offering that deal officials believe could value the combined firms at roughly $500 billion and raise roughly $30 billion. For the last few months, CEOs of the country's six largest banks have made pilgrimages to the White

House to pitch how they'd pull off the deal without disrupting mortgage rates. But as Wall Street Journal finance reporter, Ben Dummit says, there's still a lot to be worked out. So, Ben, what do we know about a potential IPO for Fannie Mae and Freddie Mac at this stage? Well, at this point, I guess Trump and his courts or working with him on this, they envision an IPO that would value the combined entities at about $500 billion and raise $30 billion. You know, that said, it's uncertain whether or not Fannie Mae and Freddie Mac will be IPOed individually as separate companies or together. So that will go a long way in determining ultimately.

lead the valuation and the amount raised. If they do it as one, a combined entity, then it would probably be the largest IPO ever eclipsing Saudi Arabia's Aramco IPO, which to date is the largest ever. Aramco is the Saudi state petrol company. So, Ben, I think for that reason, major banks obviously want to be a part of this IPO. They'll definitely get hefty fees from this and bragging rights from working on the deal. But what complications are they? may be facing. First of foremost, just trying to navigate to Trump. You know, they're tiptoeing around him and his officials because they don't want to fall out of his good graces. For example, the Wall Street Journal reported that one bank displeased the administration for suggesting that

the valuation of the combined entity could be less than $500 billion. Goldman Sachs had sort of tried to lay low because their economist had previously said some negative things about the impact of tariffs. And so that's had that bank trying to stay out of the line of fire for Trump. And the other issue is just more structural, like these are government-controlled entities. And therefore, that brings a host of other complications when you try to take them private through an IPO. Yeah, that's one other issue that I wanted to dig into. Obviously, Fannie and Freddie are under conservatorship. Do we know if that will change an IPO? Well, I guess that's still to be determined. I mean, the expectation is the government will still control the combined company

or if the IPOs are done separately, then control each of the companies. But shareholders or investors, that's going to be a concern for them. There's a concern that they might not be offered to generate the most profits. And so the more control the government has, the greater, the potential that investors may, at least some investors may be lukewarm to the IPO. And Ben, zooming out a bit, Fannie Mae and Freddie Mac together back nearly half of the mortgages in America. What would an IPO like this mean for consumers and the broader economy? First and foremost, it would be a question of how it would impact mortgage rates. I mean, the government has made it clear, it's making clear the banks that are pitching for this

IPO, that the structure has to guard against an IPO leading to higher mortgage rates, and that is something that is sort of prerequisite for this IPO. But at the same time, no one really knows, right? I mean, again, that issue just speaks to the challenges of this IPO, because depending on what impact will mortgage rates have on the operations, you know, in terms of the profitability of these companies, which is something that the investors are going to be concerned about versus the general public who obviously don't want higher mortgage rates. And, Ben, lastly, do we have a sense of when this IPO could go ahead?

Well, before the shutdown, the government shut down, the view that it was going to be imminently. But now that's less certain. Ideally, they were hoping to do it before the end of this year, but that's looking less probable. Ben, thanks so much for joining us, really interesting stuff here. Thanks, Caitlin. I appreciate it. We are exclusively reporting that a major fire has leveled a key part of a New York aluminum plant in just hours. Novellis's plant supplies about 40% of the U.S. auto industry's aluminum, and its absence is going to disrupt business at Ford Motor and other automakers for months to come. Novellis said a major portion of its Aswego plant has been knocked offline until early next year. Ford, the largest user of the plant's aluminum for its F-150, may flag implications to investors.

The company said it uses several aluminum suppliers in addition to Novellis. And finally, later today, Canadian Prime Minister Mark Carney will meet with President Trump in Washington to discuss tariff belief on key sectors such as cars and steel. And that's it for what's news for this Tuesday morning. Today's show is produced by Kate Bullivant. Our supervising producer is Pierce Lynch, and I'm Caitlin McCabe for The Wall Street Journal. We'll be back tonight with the new show. Until then, thanks for listening.