Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: The US is now on day thirty seven of its
Speaker 2: longest government shutdown ever.
Speaker 3: Food banks around the country are seeing increased demand as
Speaker 3: people look to replace federal food benefits that were cut off.
Speaker 4: Tens of thousands of additional federal workers have joined hundreds
Speaker 4: of thousands already furlough.
Speaker 1: President Trump's Transportation Secretary Sean Duffy announcing the FAA will
Speaker 1: cut flight capacity by ten percent, which experts say means
Speaker 1: thousands of flights will be canceled.
Speaker 5: The longer it goes on. And we see this in
Speaker 5: the polling that the numbers creep up in terms of
Speaker 5: number of Americans who say that this shutdown is impacting
Speaker 5: them personally.
Speaker 2: Bloomberg's White House reporter Gregory Cordy.
Speaker 5: And that's because there's a lot of monthly things that
Speaker 5: the government does. If you're renewing a passport, if you
Speaker 5: rely on any kind of assistance over time, you're going
Speaker 5: to start to notice that your government's not responsive to
Speaker 5: your needs.
Speaker 4: Certainly, we are coming up against to the Thanksgiving holiday
Speaker 4: and just a few weeks.
Speaker 2: Here, Bloomberg's Congress editor Megan Scully.
Speaker 4: And we're seeing flight delays due to groundstops because of
Speaker 4: staffing shortages, particularly among air traffic controllers. Food prices have
Speaker 4: been a problem for many Americans now for the last
Speaker 4: several years, and with the shutdown comes uncertainty about the
Speaker 4: immediate future of snap benefits.
Speaker 5: Every shutdown is a little different. We and Washington have
Speaker 5: gotten used to this as a symptom of our political dysfunction,
Speaker 5: and to some extent, there's a script. But every shutdown,
Speaker 5: the political context is different, the timing is different. The
Speaker 5: government just does different things at different times of the year,
Speaker 5: and so yeah, leading into the holidays, and with the
Speaker 5: background of this affordability crisis, it's a perfect storm of
Speaker 5: issues all coming together with this shutdown.
Speaker 2: I'm Sarah Holder, and this is the big take from
Speaker 2: Bloomberg News Today on the show, the longest government shutdown
Speaker 2: in American history, Who it's impacting most, and what it
Speaker 2: means for the economy long term. The US's prolonged shutdown
Speaker 2: started on October first, after negotiations over the government's spending
Speaker 2: package broke down. Democrats couldn't get Republicans to agree to
Speaker 2: include subsidies for Affordable Care Act healthcare plans in the bill.
Speaker 2: Without them, the average healthcare premium is expected to double.
Speaker 2: And as the weeks have dragged on, the consequences of
Speaker 2: the shutdown and the stakes of reopening have become more
Speaker 2: and more urgent.
Speaker 5: Without a federal budget to pay for a whole variety
Speaker 5: of programs, One of the casualties of that is the
Speaker 5: Food Assistance program.
Speaker 2: That's my colleague Gregory Cordy, who covers the White House
Speaker 2: and the Budget.
Speaker 5: Formerly we knew as for food stamps. Now we call
Speaker 5: it SNAP, And as we get into the second month
Speaker 5: of the shutdown, the benefits well is running dry. This
Speaker 5: foodstamp program is funded on a month to month basis,
Speaker 5: but it costs about eight billion dollars eight or nine
Speaker 5: to fund food stamps for a month.
Speaker 2: SNAP has only been funded through October, and Bloomberg's Congress
Speaker 2: editor Megan Scully says the question of what happens to
Speaker 2: SNAP funding in November has been at the center of
Speaker 2: an ongoing legal fight.
Speaker 4: We've really seen Trump's priorities here. He has been very
Speaker 4: free with moving money to pay for military salaries, to
Speaker 4: pay for our salaries for law enforcement. But he went
Speaker 4: to court to fight against moving money out of the
Speaker 4: contingency Fund to pay for SNAP. Particularly the SNAP fight
Speaker 4: has been interesting given that this administration, particularly the White
Speaker 4: House Budget Office, has been extremely aggressive about asserting the
Speaker 4: power of the purse, which is really Congress's domain. But
Speaker 4: we saw with a SNAP fight for them, they really
Speaker 4: took a step back and said, no, we cannot legally
Speaker 4: move these funds until they were ordered by a federal
Speaker 4: judge to do so.
Speaker 2: The federal judge ordered the Trump administration to dip into
Speaker 2: the USDA's contingency fund to cover SNAP benefits, but the
Speaker 2: Trump administration says that money isn't enough to cover all
Speaker 2: of the forty two million people who rely on the
Speaker 2: program each month. In a court filing late Wednesday night,
Speaker 2: lawyers for the Department of Justice said they could only
Speaker 2: cover two thirds of recipient's benefits for November, But on Thursday,
Speaker 2: a federal judge in Rhode Island issued a new order
Speaker 2: saying the Trump administration has to find a way to
Speaker 2: pay out the full amount. Food access isn't the only
Speaker 2: thing that could be disrupted by the shutdown. As government
Speaker 2: employees across the country go without pay or are furloughed,
Speaker 2: it becomes harder and harder to pay bills like rents
Speaker 2: and mortgages. Given the length of the disruption, Gregory's team
Speaker 2: has been watching for signals that evictions or foreclosures could
Speaker 2: be on the horizon.
Speaker 5: Usually it takes sixty to ninety days for an eviction
Speaker 5: to work its way through whatever local process there is
Speaker 5: from state to state. But we've seen things like federal
Speaker 5: agencies give letters to their employees that they can then
Speaker 5: take to their mortgage company or their landlord saying, please
Speaker 5: excuse this federal employee from having to pay their rent
Speaker 5: this month because we're in the middle of a shutdown.
Speaker 5: Of course, that letter has no legal bearing. Your bank
Speaker 5: or your landlord is under no legal obligation to honor
Speaker 5: what's essentially an IOU from the federal government. We're going
Speaker 5: to pay this employee when the shutdown ends, Can you
Speaker 5: please let them slide on their rent? Those are the
Speaker 5: kinds of things as the shutdown continues that federal employees
Speaker 5: are feeling the strain, and of course that reverberates through
Speaker 5: the federal government as absenteeism rates go up from federal employees,
Speaker 5: many of whom are doing essential functions but have to
Speaker 5: juggle childcare and rent and other things in their daily
Speaker 5: lives because they're not getting paid.
Speaker 2: Those apps and tea rates can have a huge impact
Speaker 2: on one sector, in particular, air travel. When the government
Speaker 2: is shut down, workers under the Federal Aviation Administration, like
Speaker 2: air traffic controllers, have to work without pay, so do
Speaker 2: Transportation Security Administration workers TSA agents.
Speaker 4: We are seeing their apps and tee rates begin to
Speaker 4: tick up, resulting in flight delays and groundholds at airports
Speaker 4: around the country. Just last week, when the Senate was
Speaker 4: leaving town for a long weekend, the air traffic controllers
Speaker 4: at Reagan National Airport, the airport that most Senators used
Speaker 4: to leave DC, the closest airport to downtown Washington. Several
Speaker 4: air traffic controllers did not show up to work, and
Speaker 4: they had to do a ground stop, delaying traffic out
Speaker 4: of DC and delaying the center's ability to go home.
Speaker 2: With Thanksgiving only a few weeks away, a holiday where
Speaker 2: millions of Americans fly, the prospect of snarled airports and
Speaker 2: stranded tray travelers is another factor that could push Congress
Speaker 2: toward a shutdown resolution. On Tuesday, Transportation Secretary Sean Duffy,
Speaker 2: stuck with the White House's position, blaming Democrats for the shutdown,
Speaker 2: and he warned that soon things could get even worse.
Speaker 3: So if you bring us to a week from today, Democrats,
Speaker 3: you will see mass chaos. You will see mass flight delays,
Speaker 3: you'll see mass cancelations, and you may see us close
Speaker 3: certain parts of the airspace because we just cannot manage it,
Speaker 3: because we don't have air traffic.
Speaker 2: Then, on Wednesday, Duffy announced that the FAA would order
Speaker 2: airlines across forty major US airports to cut their flight
Speaker 2: capacity by ten percent, set to start on Friday. Airlines
Speaker 2: have started publishing updates about possible cancelations on their websites. So,
Speaker 2: with pressure mounting, what could get Congress to agree on
Speaker 2: a reopening plan, And even after the government shutdown ends,
Speaker 2: what could the lingering economic consequences be. That's after the break.
Speaker 2: We're nearing the close of the thirty seventh day of
Speaker 2: the US government shutdown. Every day it continues, Congress is
Speaker 2: under more and more pressure to come to a compromise
Speaker 2: that would end it. Tuesday's elections around the country swung
Speaker 2: in Democrats' favor, which some Republicans took as a signal
Speaker 2: that the shutdown could have lasting political consequences. Trump has
Speaker 2: repeatedly called for abolishing the filibuster in the Senate, an
Speaker 2: extreme move that would allow Republicans to force through a
Speaker 2: partisan budget on a simple majority vote, But Republicans in
Speaker 2: the Senate are wary of how Democrats could leverage that
Speaker 2: in the future and don't seem to have an appetite
Speaker 2: to do it. My colleagues, Congress editor Megen Scully and
Speaker 2: White House reporter Gregory Corre, have been at the White
Speaker 2: House and at the Capitol looking for signs of when
Speaker 2: the stalemate might thaw. Here's Megan on the state of play.
Speaker 4: I think what we're seeing now is, particularly in the Senate,
Speaker 4: we are seeing some softening among Senate Democrats on the
Speaker 4: hardline that they've taken on the shutdown. They had demanded
Speaker 4: that Affordable Care Act subsidies be addressed before they would
Speaker 4: vote to reopen the government. There are some moderates who
Speaker 4: are in talks with Republicans who are saying, just give
Speaker 4: us the promise of a vote down the road. Any
Speaker 4: kind of bipartisan deal has not come out yet, has
Speaker 4: not come to the floor. We're paying attention to the
Speaker 4: Senate right now because the Senate has the filibuster still
Speaker 4: in place, which we've heard President Trump certainly complain about
Speaker 4: in recent days. But that means that at least eight
Speaker 4: Senate Democrats need to sign on to this stopgap spending
Speaker 4: bill to get it through that chamber. It cannot pass
Speaker 4: as of right now on a simple majority.
Speaker 2: Can you characterize the Democrats' strategy versus the republicans strategy
Speaker 2: right now? Gregory? How are each side of the aisle
Speaker 2: sort of thinking about ending the shutdown?
Speaker 5: Well, I think both sides are keeping a close eye
Speaker 5: on the polling on this, which has favorite Democrats. If
Speaker 5: you look at the history of the modern shutdown back
Speaker 5: through the gingrid shutdowns of the nineties, generally voters view
Speaker 5: Republicans as the aggressors on these shutdowns, even if the
Speaker 5: shoes on the other foot, And so the pulling this
Speaker 5: time around shows maybe a slightly narrower difference between the
Speaker 5: two parties, but that voters blame Republicans more than Democrats.
Speaker 5: So Democrats have that at their backs. They also have
Speaker 5: the elections this week, which they did very well on
Speaker 5: up and down the ballot.
Speaker 2: And do you think the shutdown and the chaos at
Speaker 2: the federal government level had anything to do with those wins.
Speaker 5: President Trump certainly thinks so. He was out very early
Speaker 5: even on election night, blaming the shutdown for what happened.
Speaker 5: But I think both sides are taking stocks their wins
Speaker 5: and losses and trying to see if there is a
Speaker 5: new way forward on this that will require both sides
Speaker 5: to swallow a little bit of their pride and look,
Speaker 5: compromise is a dirty word in Washington these days. It
Speaker 5: gets harder and harder to do these deals with each
Speaker 5: successive shutdown, with each successive.
Speaker 4: Budget fight, each shutdown is different. And aside from the
Speaker 4: length of this shutdown, what has struck me about this
Speaker 4: is the lack of negotiations. Each day in the capital.
Speaker 4: We've gotten into a routine where Speaker Johnson has a
Speaker 4: ten o'clock press conference, Hakem. Jeffreys has one, a little
Speaker 4: while later, Chuck Schumer has one, John Thune has one.
Speaker 4: We're seeing letters being sent in the actual mail to
Speaker 4: people who work down the hall from each other. They're
Speaker 4: talking to the press, they're reiterating talking points over and
Speaker 4: over and throughout the day, but they're not talking to
Speaker 4: each other at all.
Speaker 5: There used to be not that long ago. These gangs
Speaker 5: of senators right that would work across the island. There
Speaker 5: would be a gang of eight or a gang of six,
Speaker 5: or or whatever number they needed to find the middle
Speaker 5: ground to reach a compromise. And that just doesn't happen anymore.
Speaker 2: On Thursday, House Speaker Mike Johnson said he's not optimistic
Speaker 2: about a quick end to the shutdown. Senate Democrats, emboldened
Speaker 2: by Tuesday's election results, spent much of the morning hunkered
Speaker 2: down in Chuck Schumer's capital office weighing their own next steps.
Speaker 2: But whenever the shutdown does end, things won't go back
Speaker 2: to normal overnight.
Speaker 5: When the shutdown ends. Whenever it ends, be that this
Speaker 5: week or Thanksgiving or the end of the year, or whenever,
Speaker 5: the question is going to be what starts back up
Speaker 5: again in what has been dormant for so long during
Speaker 5: the shutdown that we might not see it ever come back.
Speaker 4: So typically during a government shutdown, we lose about fifteen
Speaker 4: billion dollars a week is the sort of agreed upon
Speaker 4: general estimate that is typically recovered though the end of
Speaker 4: the shutdown, when all federal employees, including those who are
Speaker 4: essential and furloughed, get their back pay. And they can
Speaker 4: pay their bills, and they can do their Christmas shopping
Speaker 4: and all of that. Typically, not everything, but most economic
Speaker 4: activity is recovered. What's different about this one? There are
Speaker 4: a few things that are different about this one. One,
Speaker 4: Trump has threatened not to pay furloughed federal employees back,
Speaker 4: which has created a level of uncertainty among that population
Speaker 4: of people. The other one is lingering concerns about long
Speaker 4: term layoffs and what happens. So far, the layoffs have
Speaker 4: been targeted and have been relatively small. But this comes
Speaker 4: on the heels of cuts made by Elon Musk's Doge
Speaker 4: Group earlier this year, by federal employees who have chosen
Speaker 4: to quote take the fork and received essentially a buyout
Speaker 4: for resigning their positions. It's just one more layer of
Speaker 4: complexity to this workforce.
Speaker 5: Certainly, I think what the Trump administration has already done
Speaker 5: is looked at what areas that Congress hasn't funded and said, okay, look,
Speaker 5: if Congress has determined that these aren't things that we
Speaker 5: really have to do during a shutdown, then maybe we
Speaker 5: don't have to do them. Ever.
Speaker 4: But in addition to the federal workforce, you have forty
Speaker 4: two million Americans who get snap benefits who are financially
Speaker 4: constrained more so than usual during the shutdown. And then
Speaker 4: you have another twenty four million Americans who are getting
Speaker 4: notices now and have to decide whether or not to
Speaker 4: continue their Affordable Care Act insurance into next year. So
Speaker 4: there is a tremendous amount of uncertainty. And this is
Speaker 4: not a small portion of the population. It's a pretty
Speaker 4: big swath of the US economy.
Speaker 2: Measuring the true economic impacts of the shutdown and its
Speaker 2: aftermath will pose its own challenge. The agencies that collect
Speaker 2: economic statistical data have also gone dark. September reports went out,
Speaker 2: but no October data has been collected or shared.
Speaker 5: We've already missed a month's worth of price data. We
Speaker 5: are missing employment data. We might be able to fill
Speaker 5: in the gaps of some of those going backwards. It's
Speaker 5: really hard to collect prices if you're not doing it
Speaker 5: in real time. The Census Bureau is almost entirely shut down.
Speaker 5: So not only is this shut down impacting basic government services,
Speaker 5: but it's also creating a huge hole in our knowledge
Speaker 5: of exactly what the state of the economy is. And
Speaker 5: many of these statistics will take years to sort of
Speaker 5: recover and find its new baseline, and along with the
Speaker 5: Trump administration's cuts to statistical agencies, again, some of those
Speaker 5: statistics that we take for granted here at Boomberg may
Speaker 5: never come back.
Speaker 2: I pose the hardest question to Megan. She's covered Congress
Speaker 2: for years, so I asked her when she thinks the
Speaker 2: shutdown might end.
Speaker 4: I think we are starting to see some early shoots
Speaker 4: of compromise that could bring an end to this shutdown
Speaker 4: by the middle of next week. That will require not
Speaker 4: just a deal in the Senate, but Mike Johnson agreeing
Speaker 4: to whatever the Senate decides and bringing those four hundred
Speaker 4: and thirty five members back to Washington to vote, and
Speaker 4: of course Donald Trump agreeing to the deal as well.
Speaker 4: But I should also note that even when we get
Speaker 4: to the end of this shutdown, the clock is just
Speaker 4: starting to what might be the next shutdown. We're looking
Speaker 4: at delaying this debate over federal appropriations into December or January,
Speaker 4: not indefinitely, so there will be celebration when the government
Speaker 4: reopens and federal workers are paid and TSA and air
Speaker 4: traffic controllers are fully staffed. But we could be going
Speaker 4: through this all over again in just a month or two.
Speaker 2: Wow. So this government shutdown is the longest in history,
Speaker 2: but it might not be the.
Speaker 4: Last, certainly not.
Speaker 2: This is the Big Take from Bloomberg News. I'm Sarah Holder.
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Speaker 2: Thanks for listening. We'll be back tomorrow.