Policy Week in Review – Shutdown Update, Tariffs at SCOTUS, and Election Recap
Updated: Apr 23
Federal Shutdown Update & Key Takeaways
The Senate appeared closer this week to a deal that will reopen the government.
The elusive agreement appeared to be between Senate Majority Leader John Thune (R-SD) and moderate Senate Democrats, acting independently from Minority Leader Chuck Schumer (D-NY).
There are reports that Democrats have yet to sign off on a final deal.
Senate Democrats may block a vote on a deal until the details are assured.
Whether an agreement is made this weekend hinges on two key issues:
What will the GOP guarantee regarding health care subsidy extensions.
Whether House Republicans will guarantee a vote on a deal.
The left flank of the Democratic Party is pushing to deny the GOP offer.
Pressure is increasing on both sides with flight issues as a potential tipping point.
The current presumption is that the deal is a short-term CR until January 2026, three full-year appropriations bills, rehiring federal employees, and a guaranteed path to extend Affordable Care Act (ACA) subsidies.
If Senate Democrats block this procedural vote today it could send negotiators back to the drawing board.
Meanwhile, President Trump has called on the Senate to end the 60-vote threshold to stop a filibuster and reopen the government with 50 votes.
We do not expect Senate Republicans to change the legislative filibuster.
Two Steps Forward, One Step Back – Negotiations Continue
For the first time this week, Republicans and Democrats demonstrated optimism that they could find an off-ramp to the current government shutdown. Midweek, however, moderate Democrats slowed negotiations in the wake of successful election night for their party. The far left is now calling a deal “surrender.” Speaker Mike Johnson (R-LA) said that he was “less optimistic” yesterday than he was at the start of the week. The fact that factions from the far sides of either party are opposing a compromise may mean a compromise is close.
The news Thursday night was better, with Leader Thune telling colleagues he would start the voting process this weekend. Democrats may oppose procedural bills Friday because the promises from Leader Thune aren’t yet written into a bill and there is no promise of a House vote. Even if initial votes to proceed fail as final details are hammered out, we still believe that a final deal could come together at any time.
The bottom line is that both sides are making progress. The momentum is moving in the right direction to end the shutdown. Bipartisan negotiations have met in earnest behind the scenes. It has been reported that a group of Republican and Democratic senators are trading proposals to reopen the government. The pressure of travel issues with the Thanksgiving holiday looming will hasten the end of the shutdown.
Policy Details of a Potential Deal
Senators must agree on a number of policy details before the government is reopened. Below are the big questions about the bill that still need to be answered.
What portion of enhanced tax credits can Republicans guarantee to extend?
Can Senate Republicans ensure the House will vote on their agreement?
How long will a new continuing resolution last (before or after January 1, 2026)?
Will the deal include year-long appropriations of bills for Agriculture, Military Construction/VA, and the Legislative Branch? It appears the answer is yes.
Will the agreement guarantee rehiring workers laid off during the shutdown?
Are there assurances to reimburse missed federal payments to all states?
These issues are being discussed behind closed doors. The fact that the items are this specific means that discussions have been credible. There is a feeling on the Hill that travel delays and flight cancellations will be the last straw, and the deal will come within a matter of days unless the Democratic base revolts.
Supreme Court Arguments on President Trump’s Tariffs
Earlier this week, the U.S. Supreme Court heard oral arguments in the case against tariffs imposed under the International Emergency Economic Powers Act (IEEPA). While Treasury Secretary Scott Bessent said he was “optimistic” after the hearing, the prevailing wisdom is that six of the nine justices expressed skepticism and could be prepared to rule against them.
On the other hand, the Court has been hesitant to unilaterally dismantle largescale policies (like the ACA or the Tax Cuts and Jobs Act). The Court is also hesitant to do the work of Congress – such as clarifying the statutory limitations of IEEPA. Justice Amy Coney Barrett, for instance, expressed concerns about the potential chaos that could result from the Court ruling against the tariffs, in particular relating to issuing reimbursements.
Even if some of the tariffs are stricken down, the White House could potentially reinstate similar duties under Section 232 or Section 132. There is no firm deadline for the Court to rule on the case, although both sides have asked for a quick ruling. We will have more information on the potential outcomes from these arguments next week.
Measuring the Economic Impact of the Shutdown
Amid the government shutdown, conflicting economic news from the private sector was released this week. On a positive note, ADP reported that private sector payrolls grew by 42,000, higher than expected and a significant increase from September’s losses.
But a report also found U.S. employers cut more than 150,000 jobs last month, the biggest reduction in October in more than two decades. Most of the job losses were in tech, retail, and services. The news comes as companies like Target and Amazon announced large layoffs.
Most macroeconomic government data has been held up by the shutdown. The Bureau of Labor Statistics (BLS) will once again fail to release its scheduled unemployment rate and jobs numbers tomorrow. In addition, several economic measures from the Bureau of Economic Analysis (BEA) have been delayed. Below is a rundown of major economic indicators that have been missed due to the shutdown.
September 2025 unemployment situation and rate.
September 2025 state employment and unemployment.
September Consumer Price Index for inflation.
Gross Domestic Product for the 3rd quarter 2025.
State job openings and labor turnover for October 2025.
U.S. international trade data for September 2025.
October 2025 unemployment situation and rate.
There is also an open question about the economic cost of the shutdown. About to enter its sixth week, the shutdown is now the longest in history and could be the most impactful. In order to determine the cost to the U.S. economy, the Congressional Budget Office (CBO) estimated on October 29, 2025 that “although most of the decline in real GDP will be recovered eventually...between $7 billion and $14 billion (in 2025 dollars) will not be.”
Election Recap
Democratic Candidates Sweep in Blue States
This past Tuesday, statewide elections were held in New Jersey and Virginia. In New Jersey, Democratic candidate and former U.S. Representative Mikie Sherrill beat out Republican Jack Ciattarelli by more than 13 percentage points.
Meanwhile, in Virginia, former U.S. Representative and Democratic candidate Abigail Spanberger defeated Republican Lieutenant Governor Winsome Earle-Sears by over 14 percentage points. Down ballot, Democrats also won the races for lieutenant governor and attorney general.
California Approves Temporary Congressional Maps
In California, Proposition 50 was on the ballot and easily passed with nearly 64% of the vote. Proposition 50 puts in place a new, temporary congressional map beginning next year (2026) and through the next census in 2030. The new map aims to give congressional Democrats an extra five seats in the U.S. House of Representatives, cancelling out the extra five seats Republicans expect to gain in Texas with new maps passed earlier this year.
We expect more redistricting efforts to continue ahead of the 2026 midterms, with both Republican and Democratic-led states considering ways to gain an advantage. The advantage gained in California, for instance, could be erased by similar redistricting efforts in states like Florida, Louisiana, and Kansas. Both North Carolina and Missouri redistricting efforts have resulted in an additional Republican congressional seat each.
What to Watch Next Week
A potential deal reopening the government
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