Update 909 — Getting the Gov’t Open,
Crypto Draft, Tariff Rebate Lead Week
After 43 days of stalemate, Congress put an end to the longest shutdown in U.S. history this week. The agreement to keep the government open until January 30, mostly at current spending levels, did not address extending expiring enhancements to ACA premium tax credits, Democrats’ core demand during the shutdown, to the outrage of some Democratic members of Congress and the base. Despite the failure to negotiate an extension to these key tax credits, Democrats were seen putting health care affordability front and center, providing a foundation that could carry the blue wave in last week’s elections through the 2026 midterms.
In other developments, the Senate Agriculture Committee is moving forward with a discussion draft on crypto market structure and regulation. Meanwhile, Trump hinted at a $2000 per person dividend paid for by tariff revenue. And the Consumer Financial Protection Bureau, led by Acting Director Russel Vought, also claimed in court filings that it will run out of funding by early next year and that Vought will be legally blocked from requesting additional funds.
Good weekends all…
Best,
Dana
Headline
Congress, Trump OK End to Government Shutdown
The longest government shutdown in U.S. history came to a close Wednesday night after 43 days, as Congress passed and the President signed a package combining a “minibus” of three full-year appropriations bills and a continuing resolution (CR) extending all other discretionary funding through January 30 at prior-year levels. The deal included a reversal of the administration’s firings of federal workers during the shutdown and a ban on these reduction-in-force efforts for the duration of the CR, but notably absent was a firm agreement on extending enhancements to Affordable Care Act (ACA) premium tax credits that expire at the end of this year.
The CR passed the Senate on Monday in a 60-40 vote. Eight members of the Senate Democratic caucus “broke ranks” and voted in favor of the bill. In the House, the legislation passed Wednesday night 222-209, with just six Democratic Representatives supporting the deal.
Reactions across D.C. and the country have echoed a mix of relief and frustration, as both Democrats and Republicans take stock of what the shutdown ultimately achieved and its ramifications moving forward. There is still much work to be done on the remaining nine full-year appropriations bills, meaning the government could very well be thrust into another shutdown come February.
Below, we review the deal’s content, import, and take stock of what this development means for the Democratic Party as we head towards crucial midterm elections next November.
The Deal: What’s In, What’s Out?
The agreement, which was primarily negotiated by a bipartisan slate of Senators, includes three full-year spending bills:
- Agriculture
- Defense
- Military Construction and Veterans Affairs
Flat funding for all other discretionary programs was extended through January 30, 2026. Additionally, the deal reverses the thousands of reduction-in-force (RIF) notices that the administration issued during the shutdown and bars the administration from future RIFs for the duration of the CR.
But the most contentious and central issue in the shutdown fight was not resolved. During the funding lapse, Democrats focused their demands on addressing rising health care prices – mainly pushing for an extension of enhancements to ACA premium tax credits (PTCs) that are scheduled to expire this year. Though touted as a red line for Democrats, the final agreement included no firm concessions on this front. Senate Majority Leader John Thune (R-SD) made a “handshake” agreement to hold a vote on a PTC extension bill of Democrats’ choosing by the second week of December. But such a measure is unlikely to pass the Senate’s Republican majority, and Speaker of the House Mike Johnson (R-LA) has made it clear that the offer does not extend to the lower chamber.
Lessons from a Historic Shutdown
After fighting for more than 40 long days, many in the Democratic base are criticizing the decision to vote for a bill that included no real health care concessions as a “cave.” The fact of the matter is, Democrats have every right to be frustrated, especially after last week’s morale-boosting elections saw much success for Democrats despite (or, perhaps, due to) the ongoing government shutdown. To give up a position of leverage, given this context, is a confusing and disappointing outcome for Democrats in Congress and across the country who were ready to continue fighting.
But it is also true that the side leveraging a shutdown for political gain rarely succeeds at delivering on the demands they are negotiating for, especially when the other party has a trifecta. This case appeared to be no different, as Republican leadership refused to even entertain a bipartisan negotiation on extending the enhanced ACA subsidies. Meanwhile, shutdown pain continued to spread across the country, as more than a million federal workers went unpaid, air travel was significantly disrupted, and tens of millions of Americans lost access to valuable federal assistance like the Supplemental Nutrition Assistance Program (SNAP).
These problems were only instigated and exacerbated by the administration’s RIFs and threats to withhold pay from furloughed federal workers, as well as its legal challenges to court orders directing the administration to release SNAP funding that impeded the delivery of benefits. With all this pain building, many of the Democrats who chose to break with their caucus and support the shutdown-ending deal did so with good intentions.
Even if Democrats didn’t stick the landing, the party emerged from the shutdown battle with a honed and battle-tested messaging framework ahead of the critical midterms next November. Through the shutdown fight, Democrats got the opportunity to communicate with voters about how prices – especially for health care – are skyrocketing under Donald Trump and Republicans’ control of the Capitol. While Democrats remained laser-focused on the cost of living, Trump and the Republican leadership proved distracted and displayed harsh cruelty by holding SNAP benefits hostage, causing millions of Americans to go hungry. If Democrats can carry this message through to next year’s midterm elections, they have every possibility to continue the blue wave seen in last week’s election and position themselves as the party of affordability.
Other Developments
Senate Ag Releases Partial Draft of Crypto Legislation
This week, after several weeks with little visible progress on the Senate’s broad initial crypto market structure bill, the Senate Agriculture Committee has put forward its bipartisan discussion draft for the section of the bill covering its jurisdiction. The bill was negotiated by Senate Agriculture Chair John Boozman (R-AR) and Senator Cory Booker (D-NJ). Senate Agriculture’s main crypto-related mission is to grant new authority to the Commodity Futures Trading Commission (CFTC) to take on an enlarged role in regulating digital assets and provide a roadmap on how it would carry out its new mission.
The language of the discussion draft accomplishes much of what was anticipated when the Senate took up the issue of crypto market structure. It defines most major digital assets, such as bitcoin and ether, as “digital commodities,” and thus grants the CFTC regulatory authority over them. It also grants the CFTC additional authorities to carry out its new mission and provides some transparency and accountability requirements for crypto firms.
What is more noteworthy, however, is how much of the bill is still in development. Entire sections were left blank or in brackets to be filled out later as the two parties continue their negotiations. These include sections on anti-money laundering provisions and ethics for elected officials who engage in crypto trading, both of which are bound to be major topics of debate as the rest of the bill is hashed out. The Senate Banking Committee is supposed to produce its own market structure discussion draft to cover the material under its own jurisdiction, but little visible progress has been made in several weeks. Given the complexities of cryptocurrency regulation and how much remains unresolved and undrafted, it still appears unlikely that the Senate will put a market structure bill up for a floor vote before the year is out.
Trump Floats $2000 per American Tariff “Dividends”
Over the weekend, President Trump took to Truth Social to propose dividends of “$2,000 a person” funded by tariff revenue. Trump’s post and statements since have not made any clarifications on his proposal other than that the dividend would not be available to “high income people.”
There are many reasons to be skeptical about Trump’s intentions to utilize tariff revenue for any sort of stimulus check for Americans, including:
- Tariff Revenue Held in Abeyance: A sizable portion of Trump’s tariffs is under scrutiny by the Supreme Court following a heated round of oral arguments just last week. A ruling against the tariffs would render any revenue collected with the tariffs under review unusable.
- Insufficiency of Tariffs: Some estimate that the math of sending $2,000 to Americans simply does not work, as noted by an analysis from the Committee for a Responsible Federal Budget, seen below.
Source: CRFB
Treasury Secretary Scott Bessent tempered expectations of Trump’s proposed “dividends” by saying the President could have just been referring to the supposed tax savings from his signature One Big Beautiful Bill. In any case, this kind of proposal would need to be approved by Congress, but the White House has yet to formalize Trump’s idea. The President has promised tariff revenue to many uses, including paying down the deficit, bailing out farmers, and even replacing the income tax.
It is no surprise that the President proposed this idea after last week’s elections, when voters again made clear that affordability is still top of mind and polling suggests that voters are disappointed that Trump has not followed through on his campaign promises to tackle inflation and the cost of living.
In perhaps another attempt to quell concerns for Americans, the administration announced trade frameworks with Argentina, Guatemala, El Salvador, and Ecuador on Thursday. As these deals are formalized, it is likely that tariff rates decrease for goods that cannot be produced in the United States, including coffee and bananas. The frameworks also mention non-tariff trade barriers, such as digital services taxes that are expected to be addressed in the forthcoming trade deals.
CFPB Claims Funding Will Run out by Early 2026
The Consumer Financial Protection Bureau (CFPB) – the federal consumer watchdog created in the aftermath of the 2008 financial crisis – is set to exhaust its currently available funds early next year, leaving it largely unable to operate unless Congress appropriates additional funds. This is according to a letter filed by the Bureau on Monday night in National Treasury Employees Union v. Vought, the ongoing case in the U.S. District Court for the District of Columbia in which the union representing CFPB employees is challenging CFPB Acting Director Russell Vought’s effort to dismantle the Bureau by dismissing enforcement actions and attempting to fire 90 percent of staff.
The letter claims Acting Director Vought would be legally prohibited from requesting additional funding from the Federal Reserve, which funds the CFPB, when current funding is exhausted, citing an opinion issued on Friday by the Department of Justice’s Office of Legal Counsel, which has been met with strong criticism. The Dodd-Frank Act allows the Fed to transfer funds to the Bureau “from the combined earnings of the Federal Reserve System.” Friday’s opinion claims that “combined earnings” refers to profits, rather than revenues; therefore, the CFPB can only draw down funds on the Fed if the system runs a profit, which it has not done since 2022.
The argument that the CFPB can only draw funds from a Fed surplus gained traction on the right after the Supreme Court upheld the constitutionality of the Bureau’s funding mechanism. But the claim has since been rejected by several federal courts, as well as Republican Texas Attorney General Ken Paxton.
The letter states that Acting Director Vought anticipates preparing a statutorily required report to the President and congressional appropriations committees identifying the “funding needs of the Bureau.” Congressional Republicans who have attacked the CFPB since its inception are unlikely to appropriate funding to allow the Bureau to continue its crucial consumer protection work.
Look Ahead
Tuesday, November 18
- House Committee on Financial Services hearing: The Future of Deposit Insurance: Exploring the Coverage, Costs, and Depositor Confidence
Wednesday, November 19
- House Committee on Administration hearing: Taking Stock of the STOCK Act