Trump Blocking More Than $400 Billion in Spending, Dems Say
Happy Monday! Congress is facing a government funding deadline at the end of the month, and lawmakers have a lot of work to do ahead of a potential shutdown in October. More details on where things stand below, along with some news about blocked federal spending and what happens if the Supreme Court rejects the Trump administration's new tariffs.
Shutdown Deadline Coming Up Fast
We're now 22 days away from the deadline to avert a government shutdown at the end of the month, and while appropriators continue to work on advancing annual spending bills, congressional leaders have made little progress toward keeping agencies open into October and beyond.
Republicans are reportedly still trying to coalesce around a strategy and unite splintering factions. Some top GOP lawmakers are looking for a short-term funding extension to buy congressional negotiators more time to hammer out bipartisan spending bills. But the White House and some fiscal hawks reportedly prefer a spending stopgap that would stretch into next year: "Continually running the government on stopgaps is part of White House budget director Russ Vought's strategy to shrink federal spending as he roots for the government funding process to be 'less bipartisan,'" Politico reports. "Those kick-the-can funding bills give the White House more leeway to shift cash while depriving Democrats of any increases in non-defense funding and GOP defense hawks the military budget increases they seek."
The odds of a showdown remain high. "In the end," Politico says, "the standoff could hinge on Speaker Mike Johnson's appetite for trying to pass a funding package backed by President Donald Trump but not Democrats, as he did in the spring - and whether Senate Democrats once again capitulate rather than see government operations grind to a halt Oct. 1."
Democrats insist that they won't simply accept whatever plan GOP leaders push this time, and Republicans will have to negotiate if they want to get 60 votes in the Senate. Democrats' resolve in this case has only been hardened by the Trump administration's push for a so-called pocket rescission of $4.9 billion in foreign aid funding. Democratic leaders have argued that there's no point in trying to fashion a bipartisan spending deal if the White House and congressional Republicans then try to claw back funding unilaterally.
One issue Democrats and Republicans may have room to negotiate on is an extension of enhanced Obamacare tax credits. The higher credits are set to expire at the end of the year, which would lead to higher costs for enrollees and is projected to leave millions of people without marketplace plans. Republicans are wary of taking the political blame for higher healthcare premiums. But many in the party also oppose renewing the Democratic tax break. "Johnson will lose a lot of GOP support if he includes the Obamacare tax credit in any funding bill," Punchbowl News says. "House Democrats would be needed to pass that package."
Politico notes that House and Senate appropriators are moving toward a plan that would provide a full year of updated funding for the USDA, the Department of Veterans Affairs and congressional operations, while other agencies would get short-term extensions to keep the lights on and buy time for further talks.
But it's not completely clear that Democrats will want to play ball this time around after helping avoid a shutdown in March. Already, New York Times columnist Ezra Klein - who is influential with party elites - is encouraging Democrats to consider allowing a shutdown. In a 3,200-word piece published Sunday, and an accompanying 22-minute video, Klein argues that Democrats shouldn't help further President Donald Trump's agenda or his power grabs. "I'm not going to tell you I am absolutely sure Democrats should shut the government down. I'm not," Klein wrote. "At the same time, joining Republicans to fund this government is worse than failing at opposition. It's complicity."
The bottom line: Time is running short, and no one knows what's going to happen.
Trump Blocking More Than $400 Billion in Spending, Democrats Say
The Trump administration is blocking more than $400 billion in congressionally approved funding, according to an update from top Democratic appropriators.
Sen. Patty Murray and Rep. Rosa DeLauro, the top Democrats on the Senate and House Appropriations Committees, on Monday updated a tracking site, first released in the spring, that details the funding that the Trump administration and White House budget director Russell Vought are freezing, cancelling or fighting in court to block.
"We are now nine months into the year-and weeks away from the end of the fiscal year-and President Trump and Russ Vought continue to withhold hundreds of billions of dollars from families, farmers, children, small businesses, and communities in every part of the country," Murray and De Lauro said in a joint statement. "They are cheating families all while giving big corporations and billionaires trillions of dollars in new tax breaks. ... Republicans have total control in Washington-and total control of whether Americans will receive the funding they are promised. Trump and Vought need to stop blocking these investments, and Republicans need to join us in insisting that every last dollar flows-particularly the billions of dollars in funding that will otherwise expire at month's end."
In April, the Democratic tracker said the administration was blocking at least $430 billion in funding. A June update put the number at more than $425 billion. With the end of the fiscal year approaching, the tracker now shows at least $410 billion being withheld and at risk of expiring.
"Since the last update in June, some funding has been released in the face of public outcry-and a number of investments that were being blocked have since been rescinded through Republicans' reconciliation bill and President Trump's rescissions package. This funding is no longer listed in the tracker," the Democratic news release says.
The Democrats note that their tally is not exhaustive and say that efforts to fully track blocked funding are complicated by the administration's systematic efforts to obscure its funding moves and an "unprecedented lack of transparency."
With a shutdown deadline looming at the end of the month, Murray and De Lauro added that they are prepared to work with Republicans to pass bipartisan funding bills, and they called for Congress to reassert its power of the purse: "Any funding agreement must reflect Democratic priorities, and we must pass full-year spending bills that ensure lawmakers-not Donald Trump and Russ Vought-decide how taxpayer dollars get spent."
Vought and the Trump administration have been challenging congressional power over spending, with the White House successfully clawing back $9 billion in appropriated money and now looking to rescind another $4.9 billion. But administration officials reportedly pushed back on the latest Democratic tally, with one unnamed senior administration official telling The Hill: "If anyone knew what Murray and DeLauro were smoking, they'd be rich."
Bessent Says US Would Have to Refund 'About Half' of Trump's Tariffs if Supreme Court Rules Against Them
Treasury Secretary Scott Bessent said Sunday that the U.S. could be required to refund billions of dollars in tariff revenues if the Supreme Court rules against a key part of President Donald Trump's trade policy.
Appearing on NBC News' "Meet the Press," Bessent was asked if the administration was prepared to offer "rebates" to U.S. importers in the event that the Supreme Court strikes down Trump's tariffs, some of which were rolled out under the International Emergency Economic Powers Act, which authorizes the president to alter trade policy in response to a national emergency. Bessent defended the use of the IEEPA, saying that both the fentanyl crisis and the overall trade deficit constitute genuine emergencies. However, if the court disagrees and finds that Trump exceeded his authority, Bessent said the U.S. would have to refund billions of dollars in revenues collected over the last few months.
"If the court says it, we'd have to do it," Bessent said.
Not all of the nation's tariff revenue is in question, since some of it is being collected under long-standing trade agreements and some is related to sector-specific levies that Trump introduced under a different legal authority. But Bessent estimated that most of the tariffs now being collected - which have risen from about $8 billion a month to about $30 billion a month - would have to be returned to the U.S. importers that paid the levies.
"So we would have to give a refund on about half the tariffs, which would be terrible for the Treasury," Bessent said.
According to the conservative-leaning Tax Foundation, about 69% of U.S imports, worth roughly $2.2 trillion, are currently covered by tariffs. If the Supreme Court eliminates the tariffs imposed under IEEPA, the tariffs that remain would cover just 16% of imports, worth roughly $500 billion.
Tariffs not popular: Independent economists have warned that Trump's tariffs are acting as a drag on the economy and are a likely cause of the sharp slowdown in the labor market. Bessent offered a very different take on Trump's policies Sunday, saying they were helping to strengthen the economy. "I believe by the fourth quarter we are going to see a substantial acceleration," he said.
For now, though, Trump's trade policies appear to be slowing the economy, and opposition to the tariffs is growing. A new survey of 2,385 U.S. adults conducted last week by CBS News/YouGov found that 62% of respondents said they oppose Trump's tariffs, up from 59% in June. Just 38% said they support the tariffs, down from 41% in June.
Asked about prices, 65% said they think Trump's policies are making food and groceries more expensive, while just 13% said they are making them cheaper. Seventy-one percent said they think the tariffs will make prices increase overall in the short term, and 52% said they think the tariffs will make prices increase in the long term.
Most survey respondents said they did not think Americans should be willing to make financial sacrifices for the sake of Trump's policies, though the numbers varied wildly by political affiliation. Ninety-four percent of Democrats and 71% of independents said they do not think Americans should be willing to pay more to support Trump's policies, but that number fell to 30% for Republicans.
Fiscal News Roundup
- Congress Splinters Into Unlikely Factions Over Looming Government Shutdown – Politico
- Treasury Secretary Bessent Warns of Massive Refunds if the Supreme Court Voids Trump Tariffs – CNBC
- U.S. Economy Should Take Off by Fourth Quarter, Bessent Predicts – Axios
- Democrats Accuse Trump Administration of Blocking More Than $400B in Federal Funding – The Hill
- Trump Asks Supreme Court for Emergency Order to Keep Billions of Dollars in Foreign Aid Frozen – Associated Press
- Supreme Court Allows Trump to Continue 'Roving' ICE Patrols in California – CNN
- US Raid on Hyundai Plant Leaves Korean Companies Reeling – Bloomberg
- RFK Jr. Says He Sees No Successes in the Agency He Leads – CNN
- House, Senate Leaders Look to Speed up NDAA Work This Week – Military Times
- Americans Face Biggest Increase in Health Insurance Costs in 15 Years – Financial Times
- A Tax Strategy Peddled to the Rich Comes Under Federal Scrutiny – Wall Street Journal
- Congress Eyes Stock-Trading Ban - With Tax Break Sweetener – Politico
- The Untold Saga of What Happened When DOGE Stormed Social Security – ProPublica
- Postal Traffic to U.S. Drops Over 80% After Trade Exemption Rule Ends, U.N. Agency Says – NPR
- Trump Tried to Kill the Infrastructure Law. Now He's Getting Credit for Its Projects – New York Times
Views and Analysis
- MAGAnomics Isn't Working – John Cassidy, New Yorker
- Trump's Risky Game With the Fed – Kenneth C. Griffin and Anil K. Kashyap, Wall Street Journal
- Why the Fed Should Not Cut Rates Now – Ruchir Sharma, Financial Times
- The Bond Vigilantes Will Keep on Circling – Financial Times Editorial Board
- The Coming Trump Stagflation – Robert Kutter, American Prospect
- Donald Trump's Incredible Shrinking Economy – Timothy Noah, New Republic
- Democrats Bet Briefly Preventing a Health Insurance Apocalypse Is Good Politics – David Dayen, American Prospect
- There's an Unexpected Climate Upside to Trump's Tariff Regime – James Meadway, Financial Times
- Be Bold: Vote to Decrease the Debt Limit – Doug Branch, The Hill
- We Are Watching a Scientific Superpower Destroy Itself – Stephen Greenblatt, New York Times
- How to Cut the Prison Population, Save Money and Make Us Safer – German Lopez, New York Times
- Stop Acting Like This Is Normal – Ezra Klein, New York Times