Washington: What to Watch Now

The politics of the government shutdown are about to get trickier. Today is Day 28 of the government shutdown. The Senate will be in session this week, but the House of Representatives remains in recess. The House has not been in session since September 19th, when it voted to pass a bill that would fund government operations until November 21st. The Senate has voted 12 times on that plan, never getting more than 55 votes in support, five short of the 60-vote supermajority needed to pass and reopen the government. But the politics of the shutdown may get more complicated as several potential pressure points loom in the coming days. That said, with President Donald Trump on his Asia trip and occupied with trade and foreign affairs this week, it is unlikely there will be any resolution until after he returns to Washington. Here is the latest:

Pressure points are starting to stack up. Most federal employees have now missed at least one full paycheck (some paychecks received earlier this month included payment for days worked in late September). The next key paydays are today (most federal employees, including air traffic controllers) and October 31st (military personnel). On November 1st, funding for the Supplemental Nutrition Assistance Program (SNAP), which provides food stamps and other assistance for about 42 million Americans, is expected to run out. The administration says it will not tap contingency funds to continue providing SNAP aid to states. Funding for Head Start, the early childhood education and support program, is also expected to run out on or soon after November 1st, jeopardizing programs that do not have local funding alternatives. Also on November 1st, the open enrollment window for Affordable Care Act health insurance begins, with as many as 22 million individuals likely to see higher premiums due to the enhanced subsidies that have been in place since 2021 expiring at the end of this year.

The Senate may tee up votes on specific funding proposals. With the Senate no closer to passing the temporary extension of funding to reopen the government broadly, Republican leaders are considering votes on narrower proposals:

• Air traffic controllers. With airline delays increasing due to the use of sick days by controllers frustrated with being forced to work without pay, including 13,300 delayed flights this past weekend, Sen. Ted Cruz (R-Texas) has a bill to pay them.
• Military personnel. Sen. Dan Sullivan (R-Alaska) is pushing a stand-alone measure to ensure servicemembers are paid during the shutdown.
• Federal workers. Last week, the Senate rejected legislation authored by Sen. Ron Johnson (R-Wis.) to pay all federal workers required to work during the shutdown. The Senate also rejected a Democrat alternative, pushed by Sen. Chris Van Hollen (D-Md.), to pay all federal workers, both those furloughed and those working. The two sponsors have said that they were talking about combining their bills to try to find a way forward on a bipartisan basis.
• SNAP benefits. Sen. Josh Hawley (R-Mo.) is seeking a vote on his bill to fund the food assistance program for the duration of the shutdown.

A longer "continuing resolution" will be needed. As the calendar races toward November, the relevance of the House-passed bill to fund the government until November 21st is decreasing. It's clear that a longer "continuing resolution" will be needed. Last week, there was talk on Capitol Hill about a measure that would fund the government through the end of the year (December 31st) or one that would extend funding through the end of the government's fiscal year on September 30th, 2026. House Ways & Means Committee Chairman Jason Smith (R-Mo.) called for a bill that would fund the government through December 2026—an unprecedented length that would take the funding battle off the table until after next year's midterms. While there is no agreed-upon plan yet, even among Republicans, the discussions are a clear acknowledgement that a longer-term funding plan will be needed soon.

The White House said there will be no Consumer Price Index (CPI) inflation data in November. The White House said "there will likely not be an inflation release next month for the first time in history" because of the shutdown. Much of the CPI data is collected in person by Bureau of Labor Statistics (BLS) employees during the first two weeks of each month. That data was not collected earlier this month, making it unlikely there will be any reliable data to report in November.

Social Security announced a 2.8% cost-of-living increase for 2026. The Social Security Administration made the announcement on Oct. 24th, after the delayed release of September's CPI data. Furloughed BLS employees had been called back to work earlier specifically to prepare the CPI report, which was originally scheduled for release on October 15th but was delayed until October 24th. The law states that Social Security's annual cost-of-living adjustment must be based on the average CPI data for July, August, and September, which is why BLS employees needed to calculate that September data. The Social Security Administration also announced that the amount of income subject to the payroll Social Security tax in 2026 will rise to $184,500 from the current level of $176,100.

Meanwhile, the Federal Reserve is expected to make another 25-basis-point rate cut at this week's meeting. The Federal Open Market Committee (FOMC) will meet today and Wednesday, with the decision announced on Wednesday at 2 p.m. ET. The tone of Fed Chair Jerome Powell's Wednesday afternoon news conference will be scrutinized, with considerable interest in what he says about inflation and jobs given the lack of government economic data during the shutdown.

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