Good evening. As the government shutdown stretched into a seventh day, the Trump administration upped the stakes in the showdown by threatening not to provide back pay for furloughed federal workers. Here's your Tuesday update.
Trump Threatens No Back Pay for Federal Workers
President Donald Trump suggested Tuesday that some of the hundreds of thousands of federal workers currently furloughed due to the shutdown may not receive back pay when the government reopens.
Asked by a reporter at the White House if the administration believes that furloughed workers should receive back pay once the shutdown is over, Trump replied, "I would say it depends on who you're talking about." The president blamed Democrats for putting "a lot of people in great risk and jeopardy" and added that "for the most part, we're going to take care of our people. There are some people that really don't deserve to be taken care of and we'll take care of them in a different way."
Potential legal questions: Trump's comments follow reports that the White House has drafted a memo stating that furloughed workers are not guaranteed back pay. The memo, reportedly written by the top lawyer at the White House Office of Management and Budget, argues that the Government Employee Fair Treatment Act of 2019 is "deficient" because it was later amended. The law, which was passed by Congress and signed by Trump during his first term, is generally seen as making back pay automatic.
"Does this law cover all these furloughed employees automatically?" one White House official said to Axios. "The conventional wisdom is: Yes, it does. Our view is: No, it doesn't."
As Axios's Marc Caputo notes, the OMB legal analysis contradicts guidance recently released by the Council of Economic Advisers and the Office of Personnel Management that said furloughed workers should receive back pay automatically. But it appears that OMB - headed by Russell Vought, whom Trump recently celebrated as a government-slashing Grim Reaper - is seeking to ramp up pressure on Democrats, or at least make them angry, by threatening not to pay some government employees.
Plenty of critics: Lawmakers from both parties were critical of the OMB memo on Tuesday. Republican Sen. Thom Tillis of North Carolina told reporters that the threat of non-payment is "bad strategy" and "probably not a good message to send right now to people who are not being paid." At a press conference, House Minority Leader Hakeem Jeffries said, "Every single furloughed federal employee is entitled to backpay. Period, full stop. The law is clear. We will make sure that law is followed."
Sen. Jeanne Shaheen, a moderate Democrat targeted by Republicans as a potential ally in their effort to end the shutdown, said Tuesday that the threat of nonpayment isn't helping to end the shutdown. "It would be a lot easier to resolve the situation if Russ Vought would stop talking," she said.
Schumer Says Johnson 'Is the Main Obstacle' to Ending Shutdown
As the shutdown drags on, the partisan barbs keep flying on Capitol Hill. Senate Democratic Leader Chuck Schumer on Tuesday laid the blame for the continued impasse squarely on Republican House Speaker Mike Johnson.
"It takes two sides to negotiate, and Republicans - particularly Speaker Johnson, who seems to be the nub of the crisis - still haven't come to the table in a serious way," Schumer said on the Senate floor. "Speaker Johnson, perhaps more than anyone else, has dug in and shut the door to any cooperation. Speaker Johnson has become a massive roadblock to progress. Yesterday, he even said that there's nothing to negotiate on the shutdown and has sent the House home for yet another week. The House hasn't held a vote now for 18 days. They haven't been in session for two weeks. That proves beyond a doubt that Speaker Johnson is causing - and not interested in ending - the shutdown. Clearly, at this point, he is the main obstacle."
The Senate's top Democrat also said that Trump isn't taking the shutdown seriously and that the president will have to get involved for progress to be made. "Ending this shutdown will require Donald Trump to step in and push Speaker Johnson to negotiate," Schumer said. "Because without the president's involvement, Speaker Johnson and MAGA Republicans in the House are increasingly dug in."
Schumer claimed that Johnson is obstructing progress for political reasons, including avoiding a vote to release the files in the case of convicted sex offender Jeffrey Epstein. "He cares more about protecting the Epstein files than protecting the American people from the healthcare crisis," Schumer said. "But also, he has a very big problem: House Republicans, his own caucus, are bitterly divided on healthcare."
MTG goes rogue: Schumer then pointed to GOP Rep. Marjorie Taylor Greene, a Trump ally, who broke with GOP leaders in a post on X Monday evening in which she called for extending the Affordable Care Act tax credits at the heart of the shutdown fight.
"I'm absolutely disgusted that health insurance premiums will DOUBLE if the tax credits expire this year," the Georgia congresswoman wrote. "Not a single Republican in leadership talked to us about this or has given us a plan to help Americans deal with their health insurance premiums DOUBLING!!!"
For his part, Johnson dismissed Greene's criticism, saying she was not in the loop on GOP plans regarding the expiring ACA tax credits. "Congresswoman Greene does not serve on the committees of jurisdiction to deal with those specialized issues, and she's probably not read in on some of that, because it's still been sort of in their silos of the people who specialize in those issues," Johnson told reporters.
The speaker also slammed Schumer and again pointed to the senator's past warnings about the harm of a shutdown. He also criticized Schumer's negotiating history, saying that Schumer had put a partisan poison pill into a previous bill they were negotiating. "So now he wants me to be a fair broker," Johnson said. "I have been. I gave him much more grace than he ever deserved."
No Senate votes on funding bills: Senate Republicans had initially planned to hold a sixth round of votes on a pair of competing bills to fund the government. Those plans got scrapped and the Senate instead took up a slew of the president's nominations, confirming 107 as a group in a party-line vote.
White House Says It Will Use Tariff Revenues for Food Aid Program
The Trump administration said Tuesday that it plans to use tariff revenues to shore up the Special Supplemental Nutrition Program for Women, Infants and Children, known as WIC, which is projected to run out of funds later this week.
White House Press Secretary Karoline Leavitt said on social media that "President Trump and the White House have identified a creative solution" to the impending shortfall. The proposed plan is to redirect revenues generated by tariffs imposed by Trump under Section 232 - which are based on national security concerns and typically apply to specific types of products such as steel and copper - to the food aid program, which benefits nearly 7 million people at an annual cost of roughly $7 billion.
No details about the plan have been released, and it's not clear whether the administration has the legal authority to enact the proposed transfer of funds.
Trump Meets With Canada's Carney
President Trump today met with Canadian Prime Minister Mark Carney as the relations between the United States and its neighbor to the north remain strained by Trump's trade war. The meeting also comes at the free trade deal struck during Trump's first term, the U.S.-Mexico-Canada Agreement (USMCA), is up for a joint review in July 2026.
"We have some natural conflict, but we will probably work that out," Trump said, praising Carney.
The Canadian leader politely pushed back on the notion of conflict. "There are areas where we compete, and it's in those areas where we have to come to an agreement that works," he said. "But there are more areas where we are stronger together, and that's what we're focused on."
Asked why Canada and the United States have failed to reach an agreement so far, Trump said it's complicated. He again returned to the idea of competition between the two countries. "We have natural conflict. We also have mutual love," Trump said, later adding: "It's a tough situation because we want to make our cars here. At the same time, we want Canada to do well making cars. So we're working on formulas, and I think we'll get there."
Fiscal News Roundup
- White House Signals It May Try to Deny Back Pay to Furloughed Federal Workers – New York Times
- Trump Administration Threatens No Back Pay for Federal Workers in Shutdown – Associated Press
- Trump Says He'll Unveil Permanent Cuts to Government Programs Soon – CNN
- Congress Erupts Over Trump's Shutdown Backpay Threat – Axios
- Republican Leaders Clash on Emergency Troop Pay Vote – Politico
- Top House Democrat Rules Out Short-Term Extension of Enhanced Obamacare Subsidies as Nonstarter – CNN
- GOP Senator Says There's No Off-Ramp to End the Shutdown This Week – CNN
- Airport Delays Hit Second Day Amid Government Shutdown – NBC News
- E.U. Proposes 50% Steel Tariffs as Trump Effect Ripples Around World – New York Times
- Trump Administration's Farm Aid Plans Delayed by Shutdown – Politico
- Trump Administration Cuts Federal Support for Disabled Americans Facing Homelessness – Axios
- Trump Administration Considers Sale of Federal Student Loan Debt – Politico
- For Older Americans, the Cost of Poverty Is 9 Years of Life, Study Finds – CBS News
Views and Analysis
- Trump Is Using Mass Firings as a Shutdown Cudgel. Democrats Aren't Flinching – Jordain Carney and Nicholas Wu, Politico
- Why Democrats Are Casting the Government Shutdown as a Health Care Showdown – Amanda Seitz, NPR
- Marjorie Taylor Greene Just Complicated the Gop's Shutdown Messaging – Aaron Blake, CNN
- Why Some Federal Workers Aren't Scared by the Threat of Shutdown Layoffs – Andrea Hsu, NPR
- Why Silicon Valley Might Start Sweating the Shutdown Soon – Christine Mui, Juliann Ventura and Yasmin Khorram, Politico
- Six Surgeons General: It's Our Duty to Warn the Nation About RFK Jr. – Jerome Adams et al, Washington Post
- Trump's Bizarre War on New York City Infrastructure – Ross Barkan, New York
- Why Trump's Troop Deployments to US Cities Are Such a Big Deal – Stephen Collinson, CNN
- Best Evidence Yet That the Dollar Isn't Dead – Daniel Moss, Bloomberg