‘Headed to a Shutdown’: Trump Meeting Produces No Deal

Good Monday evening. Current federal funding is set to expire Tuesday night, with no deal in sight to keep the government open. Here's the latest on the shutdown showdown.

'Headed to a Shutdown': Trump Meeting Produces No Deal

The last U.S. government shutdown stretched for a record 35 days from December 2018 into late January 2019, during President Donald Trump's first term. The next U.S. government shutdown appears very likely to start Tuesday night after a White House meeting this afternoon between Trump and congressional leaders failed to yield any progress toward a deal to extend expiring federal funding.

The two sides emerged from Monday's meeting saying that the gap between them remained large and insisting that the onus was on the other party to determine whether the government would shut down.

"I think we're headed to a shutdown because the Democrats won't do the right thing," Vice President JD Vance told reporters after the meeting. "I hope they change their mind, but we're going to see."

Senate Democratic Leader Chuck Schumer said that "very large differences" remain on healthcare issues and on Trump's efforts to exert more control over congressionally approved spending. "It's up to the Republicans whether they want a shutdown or not," Schumer said, adding that Trump is "the decision-maker" and can avoid a shutdown by agreeing to some Democratic demands. "Their bill has not one iota of Democratic input. That is never how we've done this before," Schumer said.

The Republican side: Republicans argue that Democrats should accept a "clean" seven-week stopgap funding bill passed by the House to allow time for further negotiations on annual spending bills and other policy issues. They say Democrats are injecting extraneous and expensive policy demands into what could be a straightforward, non-partisan agreement to keep the government running. And they insist that they won't agree to a Democratic list of demands that would add well over $1 trillion in spending in exchange for only a short-term funding deal. The cost total includes $350 billion to permanently extend higher Affordable Care Act tax credits set to expire at the end of the year.

"This is purely and simply hostage-taking on behalf of the Democrats," Senate Majority Leader John Thune said. "As of right now it this is a hijacking of the American people, and it's the American people that are going to pay the price."

Vance called some Democratic demands "crazy" but added that he and Trump found other Democratic ideas reasonable and that Republicans would be willing to negotiate, just not in the context of a shutdown fight. "What's not reasonable is to hold those ideas as leverage and the shut down the government unless we give you everything you want," the vie president said.

The Democratic side: Democrats, eager to show they are fighting what they describe as a "lawless" administration, want to frame this showdown around healthcare costs and insist that they can't trust promises from Trump or Republicans to engage in good-faith negotiations based on their partisan actions this year.

Schumer said that Democrats had laid out some of the healthcare issues they want to address, including the threat of steep premium increases for millions of Americans if those enhanced Affordable Care Act tax credits are allowed to expire and the possibility of more rural hospitals closing due to Medicaid cuts. Schumer said that, based on how Trump looked, it seemed he was hearing about the issues for the first time. "He seemed for the first time to understand the magnitude of this crisis, and we'll hope he'll talk to the Republican leaders and tell them we need bipartisan input," Schumer said.

As Democrats strategize for a shutdown, Schumer has "sounded out" his members about the possibility of a shorter-term stopgap bill that would allow the government to reopen for seven to 10 days, Axios reported.

"Progressives see this as a sign that Schumer is caving," Andrew Desiderio of Punchbowl News wrote in a post on X, "but sources close to the leadership say he's preparing for a bunch of different scenarios to get out of a shutdown & to keep pressure on GOP to negotiate on Obamacare subsidies - & to make House look bad for being on recess." Desiderio added that the Democratic stopgap plan would come into play under the assumption that Trump agrees to negotiate on the Obamacare subsidies.

Who the public will blame: Democrats are betting that Americans will blame the party in power across Washington, D.C., and a new poll out today suggests that they might have an early edge on that front. The Morning Consult poll of 2,202 voters finds that 45% say they'd blame Republicans in Congress for a shutdown, compared with 32% who say they'd blame Democrats. By a margin of 41-24, independent voters are more likely to blame Republicans. The poll was conducted last week.

"As is nearly always the case with shutdowns, all parties will come out looking worse, at least for a brief period of time," Cameron Easley, Morning Consult's head of political and economic analysis, told Politico. "Republicans should also understand that there is a palpable perception among voters that their majority status in Washington renders them responsible."

What's next: Probably a shutdown.

Trump Repeats Threat to Tariff Foreign Movies

President Trump on Monday said he will impose a 100% tariff on foreign-made films, repeating a threat he made back in May.

"Our movie making business has been stolen from the United States of America, by other Countries, just like stealing 'candy from a baby,'" Trump wrote on his social media platform. "California, with its weak and incompetent Governor, has been particularly hard hit! Therefore, in order to solve this long time, never ending problem, I will be imposing a 100% Tariff on any and all movies that are made outside of the United States."

Trump did not follow through on his threat in May, and it's clear that there would be significant challenges in doing so. The White House would need to define exactly which products are being tariffed, how the tariff would be applied and under what legal authority the tariff would be imposed.

Experts have expressed skepticism about the viability of a tariff on foreign movies. "On a practical level, I don't see how you can put tariffs on movies based on where they're made," William Reinsch, a trade specialist with the Center for Strategic and International Studies in Washington, told The Washington Post. Contemporary films are frequently made in multiple locations, Reinsch said, with international casts and crews and global sources of financing.

As we reported in May when Trump first floated the idea, Hollywood has not embraced the idea of a movie tariff, even amid growing concerns about a decline in film production in the U.S. "On first blush, it's shocking and would represent a virtually complete halt of production," one industry insider told CNN. "But in reality, he has no jurisdiction to do this and it's too complex to enforce."

Trump Admin Boosts Coal With Millions in New Subsidies

The Trump administration said Monday that it is opening up to 13.1 million acres of federal land for coal mining and providing $625 million to subsidize the cost of modernizing coal-fired power plants as part of its effort to revive the U.S. coal industry.

In April, President Trump signed a series of executive orders aimed at boosting the industry, which has been struggling for years amid concerns about the negative health effects associated with burning coal. The orders required older coal-burning plants scheduled for closure to remain open and directed the federal government to help coal producers find and mine more coal on federal lands.

"I call it beautiful, clean coal," Trump said at the time. "I told my people, never use the word coal unless you put beautiful, clean before it."

Interior Secretary Doug Burgum on Monday celebrated coal as an abundant domestic source of energy. "Everybody likes to say, 'drill baby, drill.' I know that President Trump has another initiative for us, which is 'mine baby, mine,'" he said at a press conference.

The Environmental Protection Agency and the Energy Department will also be involved in boosting coal. The EPA will extend deadlines for coal-fired plants to meet environmental regulations, while the Department of Energy will provide the federal funding for coal-plant modernization.

"Beautiful, clean coal will be essential to powering America's reindustrialization and winning the AI race," Energy Secretary Chris Wright said in a press release.

Cheers and jeers: Not surprisingly, coal industry groups applauded the moves. Rich Nolan, president and CEO of the National Mining Association, said the Trump administration is promoting "energy abundance" and contrasted its approach with the Biden administration's energy policy, which he said "were built on hostility to fossil fuels, directly targeting coal."

Environmentalists, on the other hand, condemned the moves, portraying them as further subsidies for the rich that will harm Americans' health.

"Rather than investing in affordable and clean energy, Chris Wright is taking taxpayers' hard-earned dollars and giving it to wealthy executives in the coal industry," the Sierra Club's Christine Ho said. "This is a transparent wealth transfer from everyday Americans, who are already making tough decisions at the kitchen table, to the millionaires that run the fossil fuel industry."

Fiscal News Roundup

• Scoop: Schumer Floats Shutdown Fix – Axios
• Thune Says Mass Shutdown Firings Don't "Have to Happen" – Axios
• Johnson Urges GOP Unity as Shutdown Deadline Nears – Politico
• US Plans Thousands of Shutdown Furloughs but Silent on Firings – Bloomberg
• Shutdown Would Halt Jobs Report, Key Economic Data Amid Recession Fears – The Hill
• Fed Workers' Unions Call on Schumer, Jeffries to Hold the Line Even if It Means a Shutdown – Politico
• Layoff Implementation Work Is Exempted From Shutdown, Trump Admin Says – Government Executive
• Labor Dept. Won't Release Friday's Key Jobs Report, Other Data if Government Shuts Down – CNBC
• Swalwell on Shutdown Possibility: 'I Don't Want To Be a Co-Signee to This Tyranny' – The Hill
• Trump's Big Bill Is Prompting Urgent Action in Some Democratic States, but Not in Republican Ones – Associated Press
• Trump Threatens Fresh Tariffs Related to Furniture, Movies – Bloomberg
• Trump's Tariffs Threaten to Break Some Small Businesses – New York Times
• Fragile N.C. Residents Lose Medicaid Support for Food and Housing – New York Times
• FEMA Is Paralyzed. Disaster-Torn Communities Are Paying the Price – Wall Street Journal
• Trump Shares Apparent AI Video Promoting 'Medbed' Conspiracy Theory – CNN

Views and Analysis

• John Thune: What Democrats Are Demanding Isn't Negotiation – Sen. John Thune (R-SD), Washington Post
• The Ultra Risks of a Routine Shutdown – Donald F. Kettl, Government Executive
• Are Democrats About to Walk Into a Devastating Trap? – Benjamin Hart, New York
• How Congressional Leaders Are Positioning Themselves in the Shutdown Fight – Catie Edmondson, New York Times
• The Government Never Shuts Down: What Actually Happens in Budget Standoffs – Cheryl Kelley, The Hill
• Why Is Your Flight Always Delayed? Blame Government Shutdowns – Binyamin Appelbaum, New York Times
• Congressional Battle Over Spending Could Doom Funding for Pet Projects – Jamie Dupree, Atlanta Journal-Constitution
• PhRMA CEO: Want Lower Drug Prices? So Does Big Pharma – Steve Ubl, Washington Post
• Even Conservatives Can't Get Behind Trump's Bureau of Labor Statistics Pick – Steven Lubet, The Hill
• No One Can Seem to Kill America's Economy, Despite Everyone's Best Efforts – David Goldman, CNN
• What's Really Behind the Shutdown: the GOP's Immoral Priorities – Michael Tomasky, New Republic
• Democrats Are in Crisis. Eat-the-Rich Populism Is the Only Answer – Timothy Shenk, New York Times
• Beneath the GDP, a Recession Warning – Mark Skousen, Wall Street Journal
• Millions Could Lose Housing Aid Under Trump Plan – Jesse Coburn, ProPublica
• US Could Lose Next Major War Due to Pentagon's 'Broken' Acquisition System – Sen. Tim Sheehy (R-MT) and Katherine Boyle, Fox News
• High-Skilled Visas Have Problems. Trump's $100,000 Fee Won't Fix Them – Lydia DePillis, New York Times
• Where Jobs Are Scarce, Over 1 Million People Could Dodge Trump's Medicaid Work Rules – Phil Galewitz, KFF Health News