Republicans Reject Schumer Proposal to End Shutdown

Senate Minority Leader Schumer
Sipa USA
By Yuval Rosenberg and Michael Rainey

The shutdown fight continued without a resolution on Friday as frustrations mounted from Capitol Hill to the nation's airports and beyond. Senate Republicans rejected an offer from Democrats on a compromise to reopen the government, and Democrats blocked a GOP bill to pay federal workers and military members during the shutdown. Here's your evening update.

Schumer Makes New Offer to End Shutdown, Republicans Quickly Reject It

Senate Minority Leader Chuck Schumer on Friday offered a Democratic proposal to end the government shutdown now in its record 38th day. Senate Majority Leader John Thune quickly dismissed the offer as a "non-starter," but left the door open to having the Senate work through the weekend for the first time since the shutdown started. Disruptions resulting from the standoff continue to pile up across the economy, building pressure for lawmakers to end the impasse.

President Donald Trump, engaging belatedly in the shutdown fight, added to the pressure, especially on Republicans. "The United States Senate should not leave town until they have a Deal to end the Democrat Shutdown," he wrote in an afternoon post on his social media site. "If they can't reach a Deal, the Republicans should terminate the Filibuster, IMMEDIATELY, and take care of our Great American Workers!"

Trump's post came shortly after Schumer floated what he called a simple compromise: Lawmakers would reopen the government, pass a package of three bipartisan full-year spending bills and simultaneously extend for one year the expiring Affordable Care Act subsidies at the heart of the standoff. The two sides could then create a bipartisan committee to negotiate longer-term reforms to lower healthcare costs.

That approach, Schumer said, has support across the Democratic caucus and would honor Republicans' insistence that any negotiations on the healthcare issue happen only after the shutdown ends. A month ago, House Minority Leader Hakeem Jeffries had rejected the idea of just a one-year extension of the ACA tax credits, calling it a "non-starter" and insisting that the subsidies should be made permanent. Schumer on Friday pitched it as a sensible way to resolve the shutdown mess.

"This proposal reopens the government and ensures working families who are shopping right now for their healthcare get certainty and financial relief," Schumer said on the Senate floor. "This is a reasonable offer that reopens the government, deals with healthcare affordability and begins a process of negotiating reforms to the ACA tax credits for the future. Now, the ball is in the Republicans' court. We need Republicans to just say yes."

Republicans were quick to say no. Thune told reporters that the offer was a sign that Democrats are "feeling the heat" and could be characterized as progress compared to an "unserious and unrealistic" prior proposal. "But I just don't think that it gets anywhere close to what we need to do here," he said.

Many Republicans oppose any straight extension of the healthcare tax credits, insisting that the Affordable Care Act and its subsidies need to be reformed. Thune said that Schumer's proposed one-year extension of Obamacare subsidies should be the subject of bipartisan talks.

"The Obamacare extension is the negotiation. That's what we're going to negotiate once the government opens up," he said. "We need to vote to open the government - and there is a proposal out there to do that - and then we can have this whole conversation about health care."

Election results emboldened Democrats: Entering the week, Republican leaders on Capitol Hill reportedly expected to be able to peel off enough centrist Democratic votes to approve a bipartisan deal to reopen the government, pass a package of annual appropriations and set up a vote on extending the ACA subsidies, with no promise that would pass.

The Democratic sweep in Tuesday's key elections changed the dynamics of the shutdown fight, stiffening the resolve of many in the party to keep fighting.

Democrats block GOP bill to pay federal workers: As they dig in to try to secure some GOP concessions, Democrats on Friday twice blocked a bill from Wisconsin Republican Sen. Ron Johnson to require federal workers to be paid during the shutdown.

Johnson's bill had initially been blocked two weeks ago, as many Democrats complained that it excluded furloughed workers and gave the Trump administration too much leeway to decide which workers get paid.

Johnson modified the legislation - "quite dramatically," he said - to address some of those concerns, and have the bill pay both essential workers and those who have been furloughed as well as military members. But Democratic Sen. Gary Peters of Michigan, who has negotiated with Johnson on the measure, said the changes hadn't yet gone far enough.

"There's too much wiggle room for the administration to basically pick and choose which federal employees are paid and when," he said. "I'm also deeply concerned that this would allow the administration to actually transfer this money to other purposes that aren't intended by Congress, which unfortunately we have seen happen repeatedly in this administration."

The House will be out again next week: House Republican leaders decided that November 10 to 16 will be another "district work period" for members, meaning that no votes will be held for an eighth straight week. The House last voted on September 19 - 49 days ago.

Rep.-Elect Adelita Grijalva, the Arizona Democrat who won a special election on September 23, has still not been sworn in, as House Speaker Mike Johnson refuses to allow her to be seated.

Johnson has also refused to promise a House vote on an extension of the ACA subsidies. "I'm not promising anybody anything," the speaker said Thursday, clouding the prospects of any Senate deal.

What's next: Delays and cancellations are growing worse at the nation's airports and millions of families face some uncertainty about their delayed monthly food benefits (see below). More than 1,000 U.S. flights were canceled today, and more than 4,700 were delayed, according to FlightAware. And steeper flight cuts could be on the way. Transportation Secretary Sean Duffy told Fox News today that up to 20% of flights could be canceled in the future if staffing shortages worsen.

The bottom line: For the first time since the shutdown started, senators will be sticking around the Capitol rather than heading home for the weekend, but it's not clear whether they'll have any deal to consider. "If there's something to vote on, we'll vote," Thune reportedly said.

Court Rejects Trump Effort to Block SNAP Payments

The Trump administration on Friday asked an appeals court to block a judge's order requiring it to distribute full benefits through the Supplemental Nutrition Assistance Program for the month of November, but the court denied the request while leaving the door open to further challenges in the coming days.

In a ruling Thursday, a federal judge ordered the administration to pay SNAP benefits in full using a large pool of nutrition-related funds, contrary to the administration's plan to pay only about half of November's benefits using a smaller fund specifically associated with the program.

Vice President JD Vance called the court ruling "absurd" and said the administration wanted to fund SNAP by having Democrats agree to reopen the government. "But in the midst of a shutdown we can't have a federal court telling the president how he has to triage the situation," he told reporters.

Attorney General Pam Bondi said Friday her department was requesting a stay of the judge's "utterly lawless Temporary Restraining Order." At the same time, and somewhat confusingly, the Department of Agriculture released a statement Friday saying it was in the process of making the funds available in full, as ordered.

Some states have announced that they will pay full benefits in the coming days. Massachusetts Gov. Maura Healey said on social media Friday that full SNAP benefits would be paid "IN FULL" starting on Saturday, while Pennsylvania Gov. Josh Shapiro said the benefits were already flowing and should be available shortly.

Consumer Sentiment Falls Near All-Time Low

A popular measure of consumer sentiment dropped sharply in October, falling near a record low amid growing concerns about the government shutdown and the health of the economy.

The University of Michigan's Index of Consumer Sentiment for October registered 60.3, down 6.2% from September and about 30% from a year ago. Sentiment hasn't been this low since June 2022, around the peak of the pandemic-driven inflationary surge, and before that, since the 1970s.

Joanne Hsu, who directs the monthly survey, said the government shutdown has played the largest factor in the drop. "With the federal government shutdown dragging on for over a month, consumers are now expressing worries about potential negative consequences for the economy," Hsu said. "This month's decline in sentiment was widespread throughout the population, seen across age, income, and political affiliation."

A measure of current economic conditions saw an even larger decline, falling to 52.3, nearly 11% month over month. It was the lowest reading since the series began in 1951.

There was one notable exception in the data, though: Consumers reporting the highest levels of stock ownership registered an 11% increase in sentiment - another sign of the K-shaped economy that rewards asset owners more than anyone else.

Layoffs jump: The October jobs report is not available due to the government shutdown, leaving analysts groping in the dark about the strength of the labor market, a possible source of growing consumer anxiety. Data from payroll provider ADP showed that private employers added 42,000 jobs in October, a decent number though far off the pace recorded at the end of 2024.

However, more sobering data was released this week by outplacement firm Challenger, Gray & Christmas, which reported that there were about 153,000 job cuts in October, a 175% increase from the same month a year ago. It was the highest number of layoffs in any October since 2003.

Still, most analysts think that while layoffs have picked up and the labor market has slowed, it likely hasn't fallen off a cliff - though it would be good to see the federal data to be sure. "Employers have been in a holding pattern with regards to hiring; workers have been in a holding pattern in terms of switching jobs," Sarah House, an economist at Wells Fargo, told Ben Casselman of The New York Times. "In some ways it just seems like we continue to tread water."

Quote of the Day

"They said, oh, I don't want to talk about affordability. The reason I don't want to talk about affordability is because everybody knows that it's far less expensive under Trump than it was under sleepy Joe Biden, and the prices are way down."

‒ A heated President Trump, again insisting to reporters that his economic agenda has worked to lower inflation broadly and energy prices in particular. "The biggest thing is inflation, and it's way down," Trump said.

The latest monthly inflation report showed prices rising at a 3% annual rate, and election analysts have pointed to Democratic candidates' emphasis on affordability for their sweeping wins in this week's elections.

Hegseth Tells Defense Contractors to Move Faster or 'Fade Away'

Defense Secretary Pete Hegseth said Friday that he wants the military industrial base to be on "a wartime footing," with contractors becoming faster and less risk-averse under new standards he is implementing.

"Today, at my direction, the defense acquisitions system as you know it is dead," Hegseth told a group of defense CEOs and military officials assembled at the National War College. "It's now the warfighting acquisitions system. This isn't just a name change."

Hegseth said the major defense contractors need "to focus on speed and volume and divest their own capital to get there." If they do so successfully, "the Department of War is, of course, big time supportive of profits," he said, using the administration's term for the Department of Defense. "We are capitalists, after all. But if they do not, those big ones will fade away."

Hegseth has been circulating a draft memo outlining major changes in the way the Pentagon acquires weapons. "The core principle of this transformation is simple: place accountable decision makers as close as possible to program execution, eliminate non value added layers of bureaucracy, and prioritize flexible trades and timely delivery at the speed of relevance," the memo reads, per Breaking Defense.

Todd Harrison, a defense expert at the American Enterprise Institute, said the idea of paying contractors for speed would mark a major change in the acquisition system, and comes with significant potential risks and benefits.

"That is a huge change from things like fixed-price contracts that incentivize controlling costs," Harrison said, per Defense One. "It's a big shift towards holding contractors responsible for keeping to schedule, but it comes with some big risks. It may incentivize companies to deliver poor-quality products before they are ready for prime time just to stay on schedule and not be penalized for being late."

Rep. Donald Norcross, a Democrat who sits on the House Armed Services Committee, said lawmakers have long been working on ways to improve defense acquisitions. "It is encouraging to see that the Secretary of Defense wants to improve the speed at which we deliver capabilities to our warfighters, a critical national security challenge in need of reform," he told Defense One. "[B]ut we cannot lose sight of the importance of also delivering better capabilities at a reasonable cost to American taxpayers."

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