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Early Start with Rahel Solomon

U.S. Government Shuts Down After Senate Fails To Pass Spending Bill; Impact Of Government Shutdown On Us Economy; Trump, Hegseth Address Military Leaders Outlining Vision For Armed Forces. Aired 4- 4:30a ET

Aired October 01, 2025 - 04:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

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[04:00:27]

UNIDENTIFIED MALE: This is CNN Breaking News.

BRIAN ABEL, CNN NATIONAL CORRESPONDENT: Hello and welcome to Early Start. I am Brian Abel. It is Wednesday, October 1st, 4:00 a.m. here in Washington. And the breaking news, the federal government is officially shut down and it's way too soon to know how long this impasse will last.

Democrats voted against a Republican funding bill on Tuesday and Republicans voted down. The Democrats plan to extend health care subsidies. With much of the government now out of commission, certain programs and payments will be put on hold.

Just how that will shake out does remain unclear. Federal agencies contingency plans will come into sharper focus in the hours ahead. No two government shutdowns are the same. The only sure thing is that both sides will continue to blame one another.

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SEN. CHUCK SCHUMER (D) SENATE MINORITY LEADER: We want to sit down and negotiate, but the Republicans can't do it in their partisan way where they just say it's our way or the highway. We're not doing a thing to deal with the destruction that health care, their health care bills have cost.

REP. MIKE JOHNSON (R) U.S. HOUSE SPEAKER: Chuck Schumer has made the decision unilaterally. He's the leader of the Democrats in the Senate to keep the government shut down for his own personal reasons. It is extremely selfish.

SEN. JOHN THUNE (R) SENATE MAJORITY LEADER: The Democrat caucus here in town in the Senate has chosen to shut down the government over a clean nonpartisan funding bill. Why? Because far left interest groups and far left Democrat members wanted a showdown with the president.

REP. HAKEEM JEFFRIES (D) HOUSE MINORITY LEADER: They basically have said take it or leave it with respect to our partisan Republican spending bill that continues cuts that were first put into place and in March of this year that hurt veterans, hurt children and families, hurt childcare, hurt housing affordability and hurt the health care of the American people.

(END VIDEO CLIP)

ABEL: CNN's Sunlen Serfaty has a closer look at each side's strategy during this shutdown.

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SUNLEN SERFATY, CNN WASHINGTON CORRESPONDENT: The government shutdown is in effect and there is no off ramp in sight. Senate Republicans have been very clear about their strategy going forward. They intend to keep holding vote after vote on their failed funding plan, an attempt to try to coerce more Senate Democrats to cross the aisle and vote with them on their clean funding plan that will extend funding for seven more weeks without any additions on it. Here's the Senate majority leader on Tuesday night.

THUNE: Democrats may have chosen to shut down the government tonight but we can reopen it tomorrow. All it takes is a handful of Democrats to join Republicans to pass the clean nonpartisan funding bill that's in front of us. And I hope, I really hope that some of them will join us to reopen the government, resume bipartisan appropriations work.

SERFATY: Now, part of Senate Republicans calculus here is that they feel that this pressure now that the government is shut down will continue to increase on Senate Democrats. They only need eight Democrats to cross the aisle and vote with the Republicans on their funding plan.

Last night, on Tuesday night, they got three Senate Democrats to vote with them. So they in essence only need five more Senate Democrats. And their hope here and part of their calculation is that the ramped up pressure that the government funding causes, the fact that is now shut down and that critical services will now start being effective, many of government workers will start being furloughed, potentially many more losing their job. That pressure will start to build on Senate Democrats.

But as of this hour with it is very unclear how they get out of this and both sides are dug in. Sunlen Serfaty, CNN on Capitol Hill.

(END VIDEOTAPE)

ABEL: OK, for more on the U.S. government shutdown, I'd like to bring in Maria Cardona, CNN political commentator and Democratic strategist, and Noelle Nikpour, Republican strategist and author of the book "Branding America: What Does Your Brand Say About You?"

OK, I want to do something that's maybe a bit novel here and begin with talking about solutions about how to get out of this shutdown. I think traditional wisdom would tell usually it begins with trying to bridge differences. But just last night, Speaker Johnson told my colleague Kaitlan Collins that he will not negotiate until the government is back open, saying there's nothing to negotiate right now.

So Noelle, I want to begin with you since that stance is coming from your side of the aisle here.

[04:05:00]

First, is that a sustainable position? And second, is it accurate or are there actually negotiations still happening behind the scenes? What are the solutions here?

NOELLE NIKPOUR, REPUBLICAN STRATEGIST: I do think that it is accurate. I do think that we have put the burden back on the Democrats. After all, Republicans, it's our viewpoint that the Democrats have shut the government down. You can go to the White House's website and you can look at where there was a time clock and the headline is Democrats have shut down the government.

You can see also if you go to the website, you can see many, many agencies, starting with AARP that list how horrible the shutdown is and all the ramifications of a government shutdown caused by the Democrats. And we only need, in a report that you said earlier, five more Democrats to cross the aisle and come together and work with us, work with the Republicans. We have three. We need five more.

Fetterman is one of those wonderful people that sees value in coming over and helping us, you know, avoid the government shutdown, which unfortunately we are in. But it only takes five more people and it's over.

ABEL: OK, Maria, I do want to get your reaction to that. What say you?

MARIA CARDONA, CNN POLITICAL COMMENTATOR: I say that the American people understand one very important fact. Republicans control everything. They control the White House, they control the Senate, they control the House of Representatives. Donald Trump has said, we don't need the Democrats. Don't negotiate with them. It was the Democrats, the ones who had to reach out for a meeting, Brian.

The Republicans never invited Democrats to the table to try to negotiate what a deal could look like to keep the government open. Democrats absolutely wanted to keep the government open. They also held as a priority making sure that the American people were safe from skyrocketing health care costs and were able to actually take care of their families, which this big, horrible bill that Republicans passed several months ago have not been able to let them do.

So, Republicans, I believe, understand that they are under pressure, which is why you see Donald Trump and Republicans having to lie about where Democrats stand on this, saying, knowing that it's a lie, gaslighting the American people that Democrats want to give undocumented immigrants health care. And that is just absolutely not true.

But when you don't have truth on your side, when you don't have sanity and decency on your side, then I guess it's the only thing that you have left is to lie.

ABEL: OK, I'm hearing a little bit of it with both of you already. But I do want to say that the blame game is, of course, unavoidable with any shutdown. Much less in politics as a whole, this time appears to be no different.

I was talking with some friends on the Hill yesterday who observed that it's obvious lawmakers are talking past each other. So, Maria, I'll ask you this first. How do we get here? How does that dynamic change? And are the multiple ask by Democrats here realistically achievable? Because it's not just ACA protections. They're asking for a rollback on parts of President Trump's signature big, beautiful bill, too.

CARDONA: Yes, but the problem with the signature big, horrible bill is that it is exactly that. It's big and it's horrible and it's dangerous. And that's why this big bill is one of the most unpopular pieces of legislation that the U.S. government has ever passed.

And I think Republicans know that and they have seen the polls, which is why I think again, like I said before, they have resorted to lies as to where things are on this negotiation.

And you know, Brian, you brought up a really good point earlier, which is how did we get here and how do we get out of this? The only way to get out of this is to negotiate. Who is the party that's in Washington waiting to negotiate? That's Democrats. Republicans aren't even in Washington. So how do you even begin to negotiate?

So who has as a priority actually trying to get something done and open the government for the benefit of the American people? Democrats are trying to protect Americans from skyrocketing health care costs. That is something that is very simple to do. Extend the Obama health care subsidies. Without it, the cost for American families and the health care that they pay for is going to go up by thousands and thousands of dollars. It's going to make health care impossible to pay for many families.

[04:10:02]

And Republicans will be to blame for that. But Democrats want to make sure that Americans are going to be able to take care of their families. We wish Republicans had as a priority to take care of the American people as well.

ABEL: Noelle, I do want to get your response to what you just heard there and your take on Republicans advocating for a clean CR as a path out of this at the moment.

NIKPOUR: Absolutely. And a clean CR is the pathway out of this. And the other thing of it is, you know, the Republicans. Donald Trump was voted into office overwhelmingly against Harris. And if the Democrats are tired of dealing with Republicans and they are tired of dealing with what Republicans stand for in our platform, then they must get better candidates and run better races. They didn't have policies. They didn't have anything that Americans

wanted, overwhelmingly. So the Republicans won because we won on a lot of our policies. And if you look at our platforms, lower taxes and less regulations with a litany of other things that Republicans stand for. People voted in states, swing states, for senators, for Congressmen, and for a president that's all under the Republican platform. So if the Democrats do not like who's in power, then they need to find candidates.

I think you even had a Senator Fetterman that basically said get better candidates. So we don't deal with this anymore. So, you know, that's a solution for the Democrats. You know, as for how long this is going to last, who knows? I think the last one in 2018 was 35 days. It's up to Democrats how long they want to let this go.

ABEL: Noelle, Maria, I want to make sure that it's not lost here, the real world impact of this impasse, not just for the thousands of federal workers, but the impacts on other everyday Americans. So, Noelle, Maria, what do you see those impacts being? At what point does the pain begin to actually move the needle here? What are the implications also for the midterms? Noelle, you first.

NIKPOUR: Well, the midterms are very important. And I think for Republicans and Democrats, we're all looking at the midterms. So they're very important. A government shutdown doesn't help anybody, but it certainly doesn't help the Democrats. And because we are trying to get something passed and we need five more Democrats to come our way, which should show you that we are on the winning side. We just want a clean CR. That's all we want. And they're holding everything hostage.

So, you know, to me, that's the bottom line, you know how this is going to impact everyday Americans? Well, I mean, it's going to impact national parks. As time goes on, you're going to see the pain in real time go on with different sectors.

And it's hard to, you know, map out or determine immediately what how it's going to happen, but you're definitely going to see the pain in different areas. Our government is a huge machine. It's a huge machine. And shutting down parts of the government, it's going to affect a lot of people. You may have payments that are going to be slower. You know, IRS, you're going to have loans. You're going to have a lot of things that are going to affect us.

So let's take care of it now so that we're not talking about this day after day and to where Americans, you know, it trickles down and it affects everybody. So let's take care of this.

ABEL: And Maria, what's your response and your read on the impacts here and how long it will take before those impacts actually maybe budge whatever this impasse is here in one way or another?

CARDONA: Sure. The American people are already feeling the impact of the horrific Republican and Trump policies that have been put in place. The tariffs, the mass deportations are all having a terrible effect on the economy. And I think that's why you're seeing Republicans having to resort to lies and to racist, xenophobic memes spreading around to try to blame Democrats for something that is completely their fault.

Again, Republicans control everything. They control the White House, they control the Senate, they control the House of Representatives. They never invited Democrats to come to the table to negotiate something to keep the government open.

[01:15:05]

Brian, you said that Republicans are offering a clean CR, but that's not true. It's not a clean cr. It's not the same levels that Democrats agreed to earlier this year. We have seen that Republicans have included these awful rescissions. Right. This is part of the reason why Democrats don't trust Republicans because they agree to something and then Republicans go back and pull away and cancel that.

So, Republicans have got to come to the table in good faith and actually have as a priority the benefit and the welfare of the American people. You know, one of the numbers, I think that really demonstrates where Republican priorities are says it all in the big horrible bill. Republicans have given $3 trillion of tax cuts, of tax breaks to billionaires.

Do you know how much extending the health care subsidies would be for a year for the rest of the American people? $30 billion. $3 trillion versus 30 billion, a 100 times more it would cost --

ABEL: Maria --

CARDONA: -- for billionaires.

ABEL: -- real quick. If it was a truly clean CR, is that something that you think would get through right now?

CARDONA: Well, a truly clean CR would mean that Republicans would have to go in there and put back some of the things that they took away. But yes, I think that could be a beginning of a negotiation, Brian. I absolutely do. I think that could be an opening salvo for something to get done. Republicans need to come to the table and it's the first step to try to prove that they actually care about the American people.

ABEL: All right. I do need to move forward. Maria Cardona, Noelle Nikpour. Really appreciate the discussion. Thank you guys.

CARDONA: Thanks, Brian.

ABEL: U.S. government shutdowns usually don't leave a lasting impact on the economy. Coming up, we'll explain why some economists believe that may not be the case this time around.

Plus, a new vision for the U.S. military. The Commander-in-Chief joins the Defense Secretary to address America's top brass. A look at some of the messages they delivered.

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ABEL: Historically, the U.S. economy has been able to weather government shutdowns with minimal long term damage. But this time, there are several critical factors at play that could lead to a very different outcome. CNN's Matt Egan explains what's at stake.

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MATT EGAN, CNN SENIOR REPORTER: Government shutdowns can be earthquakes for the political system, and they can cause significant headaches for everyday Americans, especially federal workers. But for the economy at large, shutdowns are usually barely a blip. Whatever damage there is tends to be limited, and it's often quickly reversed. And look, that script may play out again this time. There's also reasons to believe that this government shutdown could be different.

First off, the stakes are higher. The economy is just in a weaker position than it was during prior government shutdowns. That's especially true when you look at the job market. The Trump administration also raised the stakes by threatening to carry out mass layoffs of federal workers.

Keep in mind, the federal workforce is already shrinking rapidly, down by 97,000 jobs just since the end of January. And that doesn't even count the many federal workers who've taken buyouts.

But they were still being counted on the federal payroll. Now, look, this threat over mass federal layoffs, it could just be that, just the threat, a negotiating ploy that doesn't actually happen. But if it does, economists say it could cause significant problems for the economy because it would just be contributing to an already rising unemployment rate.

Former Biden economist Jared Bernstein, he told me it's not just bad economics. It's profoundly unfair to federal workers. He said this is basically running over innocent bystanders. It's not their fault that you can't keep the lights on.

Now, a shutdown would also leave investors and policymakers in the dark about the state of the U.S. economy. That's because if there's a shutdown, the Bureau of Labor Statistics won't release the monthly jobs report that's scheduled to come out on Friday. But it's not just the jobs report.

There's also a pair of major inflation reports scheduled to come out in the middle of October. But if the government's still shut down, the BLS won't be able to collect the data on the prices, let alone release those key economic reports.

And so that could mean that when Federal Reserve officials are meeting at the end of the month, they may be flying blind when they're trying to decide whether or not to lower interest rates. Bottom line, it's easy to see how a government shutdown is just going to add more chaos and more uncertainty to an environment that already has plenty of both. Back to you.

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ABEL: Matt Egan reporting there. And we are just hours away from seeing how Wall Street is responding to this government shutdown. Right now, we are keeping an eye on U.S. stock futures, which are lower following the shutdown. This development will only add to concerns among investors who are already monitoring inflation risk and a slowing labor market. Asia markets showed a mixed close just a short time ago.

Meanwhile, U.S. President Donald Trump is suggesting dangerous American cities could be used as a training ground for the military.

[04:25:00]

Mr. Trump joining Defense Secretary Pete Hegseth to address an unprecedented gathering of top admirals and generals in Virginia. Hegseth laid out directives as he asserted a new vision for how the military should look and act. The defense chief also said combat troops will have to meet the highest male standard and emphasized the importance of physical fitness.

(BEGIN VIDEO CLIP)

PETE HEGSETH, U.S. DEFENSE SECRETARY: Frankly, it's tiring to look out at combat formations or really any formation and see fat troops. Likewise, it's completely unacceptable to see fat generals and admirals in the halls of the Pentagon and leading commands around the country and the world. It's a bad look. It is bad and it's not who we are.

So whether you're an airborne Ranger or a Chairborne Ranger, a brand new private or a four star general, you need to meet the height and weight standards and pass your PT test.

(END VIDEO CLIP)

ABEL: CNN's Zachary Cohen is here in Washington tracking all the details.

(BEGIN VIDEOTAPE)

ZACHARY COHEN, CNN SENIOR REPORTER: More than 800 senior U.S. military officers were summoned to Quantico, Virginia on Tuesday to hear what was really a partisan presentation from both President Donald Trump and Defense Secretary Pete Hegseth.

Now, for his part, Donald Trump really did swerve between multiple topics, but it was one comment in particular that is likely to make many in the audience uneasy. Take a listen to what he said again about using the US Military in American cities.

DONALD TRUMP, U.S. PRESIDENT: I told Pete we should use some of these dangerous cities as training grounds for our military National Guard, but military. COHEN: Now, Trump went on to call the situation in these cities as a

reflection of a, quote, war from within and again has suggested that he wants to use the military to combat and to address domestic unrest. But that is something that senior Pentagon officials have historically tried to stay away from and has really been a problem and something that they've tried to avoid.

Now, for his part, Pete Hegseth really did not take the opportunity today to address issues of national security, but instead focused on a series of directives that he has been trying to implement since he first assumed the role of Secretary of Defense.

That includes implementing new standards related to physical fitness, related to grooming, things that he says are essential for installing what he calls the quote, warrior ethos and to eliminate, quote, wokeness from the U.S. military, which he has blamed for eroding the standards and the effectiveness of the U.S. military, placing the blame squarely at the feet of his predecessors.

Now, Hegseth offered these officers an ultimatum of sorts. Take a listen to what he said if they failed to implement the policies that he laid out.

HEGSETH: The sooner we have the right people, the sooner we can advance the right policies. But if the words I'm speaking today are making your heart sink, then you should do the honorable thing and resign.

COHEN: Now only time will tell what tangible impact these new directives will have on the U.S. military, both from a physical and makeup sense and also the mental sense, as these troops continue to deploy across the world and address a series of geopolitical threats that face the United States today. Zachary Cohen, CNN, Washington.

(END VIDEOTAPE)

ABEL: Zachary, thank you. Still to come, more on the U.S. government shutdown, with lawmakers on both sides voicing their frustrations over the impasse.

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