Dems Will Block GOP Plan to Avoid a Shutdown, Schumer Says

It's Wednesday! Congress is two days away from a shutdown deadline and Democrats face a brutal decision. Also today, Trump tariffs on steel and aluminum took effect, drawing retaliation from Canada and Europe. We've got details.

Schumer Says Senate Democrats Won't Back GOP Plan to Avoid a Shutdown

Faced with the agonizing decision of whether to allow the government to shut down or help pass a House-approved Republican spending bill they have criticized, Senate Democrats are making a longshot play to open up a third path: a 30-day spending patch that would buy time for bipartisan negotiations on spending bills.

Senate Minority Leader Chuck Schumer of New York announced Wednesday that Democrats would block the House Republican continuing resolution (CR) funding the government through the end of September and instead look to advance a stopgap measure to keep federal agencies funded through April 11.

"Funding the government should be a bipartisan effort, but Republicans chose a partisan path, drafting their continuing resolution without any input — any input — from congressional Democrats," Schumer said on the Senate floor. "Because of that, Republican do not have the votes in the Senate to invoke cloture on the House CR."

Democrats are reportedly pressing Republican leaders to allow an amendment vote on their proposal.

With two days left until the midnight Friday deadline — and with House lawmakers gone until after next week — the Senate Democrats' choice leaves it unclear whether Congress can avert a shutdown. Republicans need 60 votes to avoid a filibuster, meaning that they would likely need at least eight Democrats to support a procedural vote.

Schumer said his caucus is unified around the short-term spending bill, despite some very public comments from several Democratic senators indicating extreme discomfort with or opposition to a shutdown.

"Voting to shut the government down will punish millions or risk a recession. I disagree with many points in the CR, but I will never vote to shut our government down," Sen. John Fetterman of Pennsylvania said in a social media post.

Some in the party fear that they would bear the blame for any shutdown or that allowing the lights to go out at federal agencies would play into the efforts by President Donald Trump and Elon Musk to dramatically scale back the size of government. But Democrats also worry that approving the Republican-passed bill will set a bad precedent, give Trump and Musk too much power over spending decisions and erode Congress's power of the purse.

Senate Majority Leader John Thune reportedly has said he won't support a 30-day funding bill.

"I think anything else they put out there is a smoke screen, because at this point, there's really one solution on the table that keeps the government funded," he said Tuesday, according to NBC News. But he reportedly expressed openness on Wednesday to negotiating a deal allowing Democrats amendment votes. "We're open to those conversations and discussions. I think right now they're still trying to figure out how they want to see this wrap up," he said.

To vote on any bill by the Friday night deadline, all 100 senators would need to agree to speed the process, giving Democrats some leverage on their demand for amendments. Still, their 30-day plan wouldn't pass — it would only allow Democrats to say that they tried to avoid a shutdown, even if most then oppose the House plan. Ultimately, once the House bill clears the threat of a filibuster, Republicans could pass the bill on their own with a simple majority.

The bottom line: The Democratic base may be clamoring for a showdown or a show of resistance to the Trump-Musk agenda. The shutdown fight is now a game of chicken and it's not clear just how far Democrats will take it — or whether Schumer really has the numbers to carry out any threat, given the concerns of moderates in his caucus that a shutdown would shift the political narrative around Musk's cuts.

Canada and Europe Retaliate as Trump's Trade War Heats Up

President Trump's new 25% tariffs on all steel and aluminum imported into the United States took effect Wednesday, raising the stakes in what some analysts see as a rapidly developing global trade war.

In response to the U.S. tariffs, the European Union said it would impose retaliatory tariffs on U.S. imports worth about $28 billion starting on April 1. But the EU also signaled that it is interested in reaching an agreement with Trump to avoid the escalation. "Jobs are at stake, prices up — nobody needs that," said Ursula von der Leyen, president of the European Commission.

Canada also responded, announcing new tariffs on roughly $20 billion worth of U.S. imports.

Trump said Wednesday that he has no plans to back down. "Of course I will respond," Trump said at the White House, though he provided no details on what his next step might be.

Trump also made it clear that his use of tariffs is part of a larger effort to recover wealth "stolen" by foreign countries. "The United States of America is going to take back a lot of what was stolen from it by other countries and, frankly, by incompetent U.S. leadership," he said. "We're going to take back our wealth, and we're going to take back a lot of the companies that left."

For now, the next move we know about comes on April 2, when Trump has promised to impose a new set of "reciprocal" tariffs mirroring other countries' levies on U.S. goods. Tariffs on automotive products produced in Mexico and Canada, currently suspended, are also scheduled to take effect on April 2.

Cost vs. benefits: Trump has provided a number of rationales for his trade offensive, including concerns about illegal immigration and drug trafficking, a desire to increase tariff revenues (which he claims are somehow paid by foreign nations rather than U.S. importers), and a long-term goal of rebuilding the U.S. industrial base. The new tariffs on steel and aluminum appear to be aligned with that third category, and economists say it could provide a boost to some domestic manufacturers of raw metals, who will benefit from reduced competition and higher prices.

However, the tariffs will also hurt U.S. manufacturers who use imported steel and aluminum as inputs in their products, which include vehicles, appliances and farm equipment. They will face steeply higher prices for materials, which will then be passed onto consumers at home and abroad.

In a 2022 analysis of tariffs placed on steel imports by former President George W. Bush, economist Lydia Cox found that more than 160,000 jobs were lost in steel-consuming industries as a result of the levies — a number far larger than the jobs created or saved by steel manufacturers, and larger than the overall domestic steel industry itself.

Tariffs are a "pretty blunt instrument," Cox said in a recent interview, per CNBC, and they create "a lot of collateral damage."

Earlier this year, former Treasury Secretary Lawrence Summers and former Sen. Phil Gramm made the same argument about the tariffs imposed on steel imports by Trump in 2018. "The tariffs on steel and aluminum created only a small number of jobs, but since for every worker in the steel and aluminum industries there are 36 workers employed in American industries that use steel and aluminum in production processes, those modest gains were offset by the jobs losses in industries that use steel and aluminum as inputs," they wrote in an opinion piece in The Wall Street Journal. "With foreign retaliation, the estimated cost to the economy of jobs created by the 2018 tariffs on washing machines, steel and aluminum clearly amounted to many times what the jobs paid in wages."

Most Americans Disapprove of Trump's Handling of Economy, Tariffs and Budget: Poll

Most Americans disapprove of the job President Trump is doing since returning to the White House, according to a new CNN poll. Nearly 60% of those surveyed call Trump's views and policies too extreme and say the president hasn't paid enough attention to the country's most important problems. And for the first time ever in CNN's polling, most Americans disapprove of Trump's handling of the economy.

In the new poll, conducted for CNN by SSRS from March 6-9, just 45% of U.S. adults approve of Trump's performance, compared to 54% who disapprove. The approval percentage matches the highest mark Trump reached during his first term, but it trails the approval rating for every other president dating back to Jimmy Carter, as measured in March of their first terms. All other presidents were above 50% early on in their terms.

On the economy, 42% of those polled called it the most important issue facing the country today, choosing it from a list of seven options. But 56% disapprove of Trump's approach, while 44% approve. It's the first time in CNN poll dating back to January 2017 that more than 50% of the public has a negative view of Trump's steering of the economy.

An even larger share, 61%, now disapproves of Trump's tariff policy, while 39% approve. Americans also give Trump low ratings on foreign policy more broadly (58% disapprove) and healthcare (56% disapprove).

Trump get his highest marks for his handling of immigration (51% approve), while views of his performance on the federal budget and management of the federal government are closely divided, though in each case a slight majority (52% and 51%, respectively) disapproves.

Nearly nine in 10 Americans, including more than 75% of Republicans, independents and Democrats, say that Trump is taking "a completely different approach to presidential power" than past presidents. About half of those surveyed called that a bad thing, but 37% said it was a good thing. And half of adults said that Trump can bring about the kind of change the country needs, with a slim minority, 49%, also saying he can manage the government effectively. Just 38% say he respects the rule of law, and just 34% think he will unite the country rather than divide it.

The White House might take some slight measure of comfort in the poll's finding that 35% of Americans say that things are going well in the country today — as dismal as that number might be, it's up from 29% as of January, before Trump took office, helped by a surge in Republican sentiment.

Trump's approval rating is also higher than those of Elon Musk (35%) and Vice President JD Vance (33%). More than six in 10 respondents said that Musk lacks the experience or judgment necessary to change the way the federal government works. And 62% say they are more worried that the Trump administration's cuts to the federal government will go too far and important federal government programs will be shut down. A far smaller 37% say they fear the cuts won't go far enough in eliminating government waste, though 73% of Republicans chose that option.

The poll was conducted among 1,206 U.S. adults and has an overall margin of sampling error of plus or minus 3.3 percentage points.

Inflation Eases in February to 2.8%

Consumer prices grew more slowly in February, according to government data released Wednesday, providing a fresh sense of progress in the effort to bring inflation back down to the Federal Reserve's 2% target.

The Consumer Price Index rose 0.2% on a month-to-month basis, easing off the 0.5% increase recorded in January. On an annual basis, the CPI inflation rate came in at 2.8%, lower than the 3.0% rate seen the month before and beating expectations by a tenth of a point.

Core CPI, which ignores volatile food and fuel prices to provide a better sense of the underlying trend, also rose 0.2% monthly, while notching 3.1% on an annual basis, beating expectations and the lowest reading since 2021.

There was some notable good news in the report, including a moderation in the rise in the cost of shelter, which was up 4.2% annually, the smallest increase since 2021. But some politically sensitive products saw significant price increases, including eggs, which were up 10.4% on the month and 58.8% on the year.

The White House quickly took credit for the positive news in the report, with Press Secretary Karoline Leavitt saying "the economy is moving in the right direction under President Trump."

But analysts noted that the February report fails to capture any of the price increases that are starting to ripple across the economy as Trump's trade war gets going. "A lot of this inflation data does not incorporate what is to come and what already has happened for tariffs," said Kevin Gordon, an investment strategist at Charles Schwab, per CNBC. "The vagaries and uncertainties associated with policy are still a much stronger force in the market than anything CPI-related or in terms of one data point."

Annual Deficit Surges to Over $1 Trillion in February

The budget deficit in February topped $307 billion, the Treasury Department reported Wednesday, pushing the total deficit for the first five months of the 2025 fiscal year to $1.15 trillion.

The five-month total is about $318 billion, or 38%, more than in the first five months of fiscal year 2024, and a new record for that time span.

Receipts in February totaled $296 billion, a 9% increase from a year ago and a record for the month. Outlays were $603 billion, a 6% increase from last year and also a record for the month.

Interest payments on the national debt eased modestly during the month, to $74 billion. But they continue to be a significant cost overall, rising to $396 billion so far this fiscal year, about the same as national defense.

Fans of Elon Musk and his DOGE project to eviscerate the federal government had little to celebrate as the data showed no signs of slower growth in spending. At the same time, Republicans have moved closer to advancing a massive legislative package that promises to expand the budget gap in the coming years, potentially adding $3.3 trillion to the deficit over the next decade.

Fiscal News Roundup

• Senate Democrats Say They Will Reject GOP's Funding Bill as Shutdown Draws Near – NBC News
• Republicans Bank on Democrats Caving in Shutdown Standoff – Time
• Trump Imposes Sweeping 25% Steel and Aluminum Tariffs. Canada and Europe Swiftly Retaliate – CNN
• Trump Allies Are Blaming Lutnick for Trump's Tariff Turmoil – Politico
• Inflation Rate Eased to 2.8% in February, Lower Than Expected – CNBC
• Blackrock CEO Larry Fink: 'The Economy Is Weakening as We Speak' – CNN
• New CNN Poll: Americans Are Negative on Trump's Handling of Economy – CNN
• Mike Johnson Gets Candid About Elon Musk – Politico
• Reductions in Force: A Look at Which Agencies Are Affected by DOGE-Led Job Cuts – Associated Press
• With Mass Layoffs, McMahon and Trump Begin Mission to End Education Department – Roll Call
• Education Department Layoffs Gut Its Civil Rights Office, Leaving Discrimination Cases in Limbo – Associated Press
• USDA Ends Program That Helped Schools Serve Food From Local Farmers – Associated Press
• EPA's Zeldin Terminates $20B in Biden Climate Grants – Politico
• Senators to Trump Social Security Nominee: 'You Will Be Responsible' if Benefits Are Interrupted – CNBC
• CR Would Provide $1.5 Billion for Extra, Unrequested Warship – Roll Call
• Trump Official Tasked With Defending DOGE Cuts Posted Fashion Influencer Videos From Her Office – CNN

Views and Analysis

• 'In DOGE We Trust:' House GOP Governs by Embracing Trump's Effort to Cut Government – Lisa Mascaro, Associated Press
• What Musk and His Tech Boys Are Actually Proving About Our Government – Carolina A. Miranda, Washington Post
• Is Trump Taking a 'Liquidationist' Approach to the Economy? – Jon Sindreu, Wall Street Journal
• Put Away Your Knives. This 'Crisis' of a Spending Idea Deserves a Shot – Mitch Daniels, Washington Post
• Where's the Economic Sense Behind Trump's Tariffs? – Ramesh Ponnuru, Washington Post
• It Really Is Trump's Party Now – Rachael Bade, Politico
• How Do You Like the Trade War Now? – Wall Street Journal Editorial Board
• The Mike Johnson Redemption – Wall Street Journal Editorial Board
• It'll Be Tough for Trump to Dig His Way Out of This One – David Goldman, CNN
• 'Tariffs Break Trust': How Trump's Trade Policy Is Putting Pressure on U.S. Farmers – Sean Conlon, CNBC
• Two Reasons for Optimism About the Economy – Justin Wolfers, New York Times