Washington on One and Shutdown Updates - 10/6/2025

THE LEDE:  A Shutdown staredown enters its second week, the Senate will try again to pass a funding stopgap this evening… Judge blocks Trump’s National Guard deployment in Portland for second time… Trump to federalize Illinois National Guard, Pritzker says… Supreme Court will hear arguments over firing of Fed’s Lisa Cook — but allows her to stay on the job for now… The FDA signed off on a second generic option for the abortion pill mifepristone on Tuesday, hours before most of the federal government shut down and despite Republican opposition to the drug…Trump delaying triple-digit pharma tariffs to negotiate drug price deals…White House pulls Brian Quintenz nomination to lead CFTC… FBI cuts ties with Southern Poverty Law Center after MAGA push… Defense Secretary Pete Hesgeth on Friday fired Navy chief of staff Jon Harrison, an unusually powerful top aide who had orchestrated a reshuffle of the service’s bureaucracy…Trump prompts Netanyahu to apologize to Qatar for bombing its capital…Hamas responded to the U.S. peace plan, saying it would accept some of its provisions — notably releasing all the hostages — but would need to negotiate the other points… FEMA withholds $300 million in grants until states account for deportations…Trump making plans to send billions in cash bailouts to farmers with taxpayer money… Pope Leo XIV denounced people who deny climate change, arguing that they are contributing to the destruction of God's creation.

THE WEEK AHEAD:   The shutdown continues with no resolution in sight. The Senate is set to vote tonight—its fifth attempt—on the House-passed continuing resolution (CR) funding the government through Nov. 21. Only three Senate Democrats—John Fetterman, Catherine Cortez Masto, and Angus King—have supported the measure so far, leaving Republicans short of the 60 votes needed to advance. GOP leaders believe more Democrats will eventually cross the aisle and plan successive votes this week.  Senate Majority Leader John Thune can force another vote Tuesday and again Thursday if necessary. Senate Minority Leader Chuck Schumer shows no sign of relenting, though pressure is mounting as federal workers prepare to miss their first paycheck Friday. The White House and OMB Director Russ Vought have warned of potential mass layoffs and rescissions targeting blue states.  Republicans are highlighting the imminent funding lapse for the WIC nutrition program, projected this week, while Democrats continue to demand an extension of enhanced Obamacare premium tax credits. Polls currently favor Democrats, but that advantage may erode as disruptions deepen.  In the House, Speaker Mike Johnson has kept members home for a second straight week, instructing them to hold local events blaming Democrats for the stalemate. The chamber hasn’t voted since Sept. 19, making this the sixth-longest shutdown in U.S. history. Johnson says he’ll recall members with 48 hours’ notice—once Senate Democrats yield.

SO WHAT ARE WE DOING?: Bipartisan, rank-and-file talks on extending expiring ACA subsidies are accelerating as lawmakers search for a shutdown off-ramp. Republicans insist any deal must wait until the government reopens.  Senate Majority Leader John Thune said he needs a “critical mass” of Democrats to back the House-passed funding bill before discussing the enhanced tax credits.  So far, only Sens. Catherine Cortez Masto, John Fetterman, and Angus King have voted to advance the GOP CR; Thune needs at least five more. “When they have eight or 10 — preferably 10, or more — let me know if there’s some conversation they want to have,” he said.  Thune is betting more Democrats will flip as shutdown pressures mount, especially after OMB Director Russ Vought threatened mass firings and cuts to infrastructure and energy projects. He also sees momentum in member-level talks that could pair a Dec. 31 extension of ACA subsidies with GOP-backed policy changes.  Floor huddles Wednesday — after the House stopgap failed a third time — focused on “mechanics” of negotiating the tax credits in exchange for Democratic votes to reopen the government. Some Democrats remain opposed to any CR without a clean extension, but others signal flexibility. “There are Republicans telling us, ‘We agree with you,’” said Sen. Tim Kaine.  Hard-liners remain a hurdle. “It’s nuts,” said Rep. Chip Roy, blasting GOP senators engaging in health-care talks.

WATCH THIS SPACE:  Senate Democrats are preparing to force a War Powers Act vote this week in response to the Trump administration’s recent strikes on alleged cartel boats in the Caribbean.  The resolution, led by Sens. Adam Schiff (D-Calif.) and Tim Kaine (D-Va.), could reach the floor as early as Wednesday. It would bar U.S. forces from engaging in hostilities against non-state actors without explicit congressional authorization.  The vote follows growing debate over the legality of the White House’s offensive. Since Sept. 2, the Pentagon has carried out four attacks on vessels it claims were cartel-operated and smuggling drugs into the U.S., killing 21 people. Lawmakers in both parties have criticized the strikes and accused the administration of bypassing Congress.  The White House recently informed Congress it considers the U.S. to be in a “non-international armed conflict” with several Latin American cartels designated as terrorist organizations, including Venezuela’s Tren de Aragua, Mexico’s Sinaloa cartel, and El Salvador’s MS-13.  Sen. Rand Paul (R-Ky.) joined Democrats in warning that innocent civilians could be harmed. Senate Majority Leader John Thune (R-S.D.) also suggested the administration may need congressional approval if the campaign expands into sustained military operations.

MUST SEE TV?:   Attorney General Pam Bondi will testify Tuesday before the Senate Judiciary Committee as part of its oversight of the Department of Justice.  Bondi is expected to face sharp questioning over her handling of several politically charged matters, including the Jeffrey Epstein case, the indictment of former FBI Director James Comey, and the department’s broader pattern of prosecuting individuals viewed as political opponents of President Trump, Hailey Fuchs reports.  One of those alleged targets — Sen. Adam Schiff (D-Calif.) — will question Bondi directly. The administration has been investigating Schiff for alleged mortgage fraud, which he has denied. Asked about his plans for the hearing, Schiff said only that there was “a raft of oversight questions we all have.”  Bondi had also been scheduled to appear before the House Judiciary Committee on Thursday, but that hearing was canceled along with all other House business while the chamber awaits Senate action to end the ongoing government shutdown.  The high-stakes Senate session is expected to draw intense scrutiny, offering lawmakers a rare public opportunity to press Bondi on the Justice Department’s independence and its role in the administration’s political and legal battles.

H1Bs:  Sen. Shelley Moore Capito (R-W.Va.) is urging the administration to exempt health care workers from its new $100,000 fee on high-skilled visa holders.  President Trump’s September directive allows the Department of Homeland Security to waive the fee for companies or industries deemed “in the national interest.” Hospitals and medical groups warn that without such an exemption, the policy could devastate rural health care — particularly in red states that strongly backed Trump.  A Journal of General Internal Medicine study found West Virginia, Iowa, and North Dakota employ the highest shares of physicians on H-1B visas. “In rural areas, this is critical health care delivery. We’ve got to keep it,” Capito said, noting concern from West Virginia University officials about staffing impacts.  Sen. Joni Ernst (R-Iowa) said hospitals in her state have also pressed her to seek relief.

CAREFUL WHAT YOU WISH FOR:  The Trump administration’s decision to terminate roughly $8 billion in clean energy funding for blue states will halt more than 200 projects intended to strengthen the power grid and spur manufacturing jobs — with fallout expected to reach over two dozen Republican-held districts, according to a list obtained by POLITICO.  The Department of Energy document, circulated Thursday on Capitol Hill, details the affected projects, including two major West Coast hydrogen initiatives designed to replace fossil fuels. Also on the chopping block are more than two dozen grid modernization efforts and numerous research and development programs slated to advance next-generation energy technologies. 

AI: The Trump administration is signaling a clear message to major players in health care and technology: it, not the private sector, will direct the future of artificial intelligence in medicine.  Senior officials at the Department of Health and Human Services told POLITICO that the administration opposes a multi-year, industry-led initiative by companies such as Microsoft and OpenAI, along with health systems including the Mayo Clinic and Duke Health. The effort — organized under the Coalition for Health AI — aims to establish private-sector standards for testing and approving medical AI tools.  “They don’t speak for us,” Deputy HHS Secretary Jim O’Neill told POLITICO, emphasizing that the federal government will maintain oversight of how AI is evaluated and deployed in health care settings.  The stance underscores growing tension between the administration and major corporations over control of AI governance, as federal agencies move to assert authority in a space long shaped by voluntary, industry-driven frameworks. 

TARIFFS:  President Donald Trump last week threatened triple-digit tariffs on pharmaceutical imports starting Wednesday. The White House now says it may not need to impose them. According to a White House official, the Trump administration has paused its plan to enact the duties as it attempts to negotiate agreements with pharmaceutical giants to avoid higher tariffs on their name-brand products — like the deal it announced with Pfizer Tuesday. The official pointed to Commerce Secretary Howard Lutnick’s remarks during the Pfizer announcement in the Oval Office. In response to a question about when the pharmaceutical tariffs would go into effect, Lutnick said the administration is “going to let [the talks] play out and finish these negotiations, because they are the most important thing to the American people.”

HAMAS:  Hamas responded to the U.S. peace plan, saying it would accept some provisions — notably the release of all hostages — while seeking negotiations on others, Bloomberg reports. Though partial, President Trump hailed the move as a breakthrough and urged Israel to halt bombing in Gaza to allow for the releases.  That puts pressure on Prime Minister Benjamin Netanyahu, whose far-right coalition opposes any pause in fighting. Following Trump’s call, Israel suspended offensive airstrikes and its occupation of Gaza City, according to Axios’ Barak Ravid. Privately, however, Netanyahu viewed Hamas’ reply as a rejection of the plan, leaving him politically cornered as global calls for a cease-fire grow.  Jared Kushner and Steve Witkoff are heading to Egypt for further talks, Axios reports. Major hurdles remain — Hamas’ disarmament and potential Israeli revisions to the plan — and WSJ sources say Hamas leaders are deeply divided, with negotiators abroad favoring compromise while military commanders resist.

TIGHTENING:  The Trump administration will cap refugee admissions at 7,500 — the lowest level in U.S. history and a steep drop from the 125,000 limit under President Biden.  Many of those slots will reportedly be reserved for white Afrikaners from South Africa, rather than people fleeing war or natural disasters who have traditionally qualified for resettlement.  Trump’s broader immigration crackdown continues to meet resistance — except at the Supreme Court. The conservative majority granted the administration another shadow-docket victory, allowing DHS to end Temporary Protected Status for up to 600,000 Venezuelans, NBC reports. That move could make many vulnerable to deportation. Meanwhile, a federal appeals court struck down Trump’s bid to end birthright citizenship, according to the AP, and Bloomberg Law reports the first lawsuit has been filed challenging the administration’s new $100,000 fee for H-1B visa applicants.

As of Monday, October 6, 2025

Overview

The federal government has entered its second week under a lapse in appropriations, with virtually all agencies now executing contingency plans.While essential operations continue—those protecting life, property, or supported by non-annual funding—roughly 80–90 percent of civilian employees across affected departments have been furloughed. The Office of Management and Budget (OMB) has directed all agencies to finalize Reduction-in-Force (RIF) plans in anticipation of a prolonged impasse.

Personnel are classified as:

• Excepted — life, property, or constitutional duties;

• Exempt — funded by user fees, trust funds, or multiyear appropriations;

• Furloughed — all other employees.

  
  

  Back pay for both excepted and furloughed personnel remains guaranteed by statute but cannot be processed until appropriations resume.

Key Weekend Developments           

Federal Judiciary – Courts will operate through October 17 using non-appropriated filing-fee balances. Essential judicial and clerk functions continue, but civil support services and administrative work have slowed. Should Congress fail to act by mid-month, the judiciary will begin staff furloughs.

Cybersecurity and Infrastructure Security Agency (CISA) – Roughly 65 percent of personnel are furloughed, leaving about 890 employees to handle critical infrastructure defense and cyber-incident response. DHS leadership has warned that if funding is not restored by late October, targeted RIFs may be required.

Financial Regulators (SEC & CFTC) – The SEC has furloughed over 90 percent of its workforce, maintaining only emergency market-monitoring functions. The CFTC is operating with about 6 percent of staff to oversee systemic-risk indicators. IPO approvals, enforcement activity, and data publications are suspended, raising market volatility and backlog risks.

Economic Statistical Agencies (BLS, BEA, Census) – With 85–95 percent of staff furloughed, publication of employment, inflation, and GDP data has stopped. Field surveys and contractor data-collection work have been paused. Extended disruption could erode analytic capacity through attrition or RIFs.

RIF Planning Across Government – OMB and OPM reaffirm that any furlough longer than 30 calendar days (or 22 workdays) must be treated as a RIF. Agencies have been told to identify “non-priority” programs in advance, effectively using the shutdown to reassess and potentially downsize functions not aligned with administration priorities.

Status of Negotiations

Talks remain stalled. Congressional leaders exchanged blame throughout the weekend, and no agreement has been reached on either a short-term continuing resolution (CR) or a broader spending framework.

• Senate Activity: The Senate reconvenes this afternoon, with test votes expected around 5:30 p.m. ET on competing CR proposals. Neither side currently has the 60 votes required for cloture, and staff describe the environment as “no endgame in sight.”

• Positions:

  • Democrats seek a CR that maintains Affordable Care Act premium-tax-credit funding and limits unilateral executive spending cuts.

  • Republicans / White House favor a short, “clean” CR with no new spending and have hinted at leveraging federal layoffs to increase pressure if talks fail.

• Outlook: With last week’s Senate test votes failing and the weekend session canceled, expectations for a near-term resolution remain low. Should negotiations remain frozen through mid-week, OMB is expected to issue a second-phase directive accelerating RIF implementation and tightening agency cash-flow management.

Emerging Operational Risks

Category	Current Assessment
Program Continuity	Agencies dependent on annual appropriations (EPA, Education, HUD, Labor) have largely halted non-essential programs, increasing the risk of delayed or canceled contracts.
Economic & Market Transparency	Suspension of BLS/BEA data releases obscures employment and inflation trends, complicating fiscal and market decision-making.
Cybersecurity Posture	With two-thirds of CISA’s workforce offline, monitoring of critical infrastructure has been significantly weakened.
Workforce Morale & Attrition	Repeated furloughs undermine morale and retention, particularly as RIF planning accelerates.
Contractor Exposure	Federal contractors face liquidity and compliance risk—especially around WARN-Act notice obligations—where work is halted or delayed.