Politics

Political news that affects economic policies and markets.

Politics
Trump cuts federal funding to Democratic-led states
The Trump administration has frozen US$26 billion in funds for Democratic-leaning states as a follow-through on its threats to use the government shutdown to target Democratic priorities. Targeted programs include $18 billion for transit projects in New York, home to two of Congress’s top democrats and $8 billion for green-energy in 16 Democratic states, including California and Illinois. These moves have made it clear that President Donald Trump would follow through on threats to use the shutdown to punish his political opponents and extend his control over the $7 trillion federal budget. During a White House briefing, Vice President JD Vance said the administration would also be forced to resort to layoffs if the shutdown lasts more than a few days. This would add to the 300,000 who will be pushed out by December and make this the first shutdown to result in permanent layoffs. Vance has denied that layoffs have anything to do with political affiliation, while at the same time blaming democrats for the shutdown. “The Chuck Schumer-AOC wing of the Democratic party shut down the government because they said to us, we will open the government only if you give billions of dollars of funding to healthcare for illegal al
Politics
Cook remains on the job; Supreme Court to meet in Jan
The United States Supreme Court said on Wednesday it will hear arguments in January on President Donald Trump’s attempt to remove Federal Reserve Governor Lisa Cook, keeping her in her role for now and setting the stage for a landmark clash over the limits of presidential power and the central bank’s independence. The justices declined to immediately rule on a Justice Department request to stay a lower court order that blocked Trump from firing Cook, who was appointed by former Democratic President Joe Biden. Instead, the court said it would wait until oral arguments are heard before deciding the issue. The case hinges on provisions in the 1913 Federal Reserve Act, which states that governors may be removed by the president only “for cause”. The statute, however, does not define the term nor outline procedures for removal, and the question has never been tested in court. On 9 September, U.S. District Judge Jia Cobb ruled that Trump’s claims Cook had engaged in mortgage fraud prior to her appointment - allegations Cook denies - were unlikely to constitute valid grounds for removal under the Act. Cook sued Trump in August after he announced he would oust her, arguing that the accusations were a pretext for her dismiss
Politics
750k employees may be furloughed under US govt shutdown
A United States government shutdown would lead to around 750,000 federal employees being furloughed, an agency has estimated, with a likely shutdown just hours away. The shutdown is set to begin from 12:01 am on 1 October EDT (2:01 pm AEST), as Congress has been unable to reach an agreement to fund the government. Many government services will be suspended, though essential operations, including healthcare programs and law enforcement, will continue. The nonpartisan Congressional Budget Office (CBO) “estimates that under a lapse in discretionary funding for fiscal year 2026 about 750,000 employees could be furloughed each day; the total daily cost of their compensation would be roughly $400 million.” “The number of furloughed employees could vary by the day because some agencies might furlough more employees the longer a shutdown persists and others might recall some initially furloughed employees.” The White House has also ordered federal agencies to create plans for firing large numbers of government employees if a shutdown begins. Another 100,000 workers are set to quit this week under the administration’s deferred resignation program, part of the mass layoffs it has enacted since January. The Senate today
Politics
100,000 federal workers set to quit under Trump plan
More than 100,000 federal workers under the Trump administration in the United States will formally quit on Tuesday, local time, under the deferred resignation program. The departures represent the largest single-year decline in civilian federal employment since the second world war. A statement from Partnership for Public Service earlier this week describes the program as allowing “federal employees to transfer their workload, leave their job and go on administrative leave through a certain end date before resignation”. “For many employees who elected to take the DRP, their last day of federal service will be Sept. 30, 2025," the statement continued. The program is one of several ways the Trump administration has approached mass cuts to the federal workforce, and this new wave of resignations is coming in response to a deadline for more funding from Congress, also on Tuesday. Additionally, the White House has ordered federal agencies to prepare plans for large-scale firings if partisan negotiations fall through without a deal in place. According to a report from Connecticut Democrat Senator Richard Blumenthal, the DPR will have a price tag of US$14.8 billion, as 200,000 workers receive full salary and benefits
Politics
Trump warns of mass firings in case of govt shutdown
United States President Donald Trump warned there could be mass layoffs if the federal government shutdown isn’t avoided this week. “We are going to cut a lot of the people that ... we’re able to cut on a permanent basis,” he told NBC News in an exclusive interview. ″[I’d] rather not do that.” The U.S. government will run out of money at midnight on 30 September unless Democrats and Republicans can agree on a funding bill. Last week , Democratic leaders were set to meet with Trump to discuss funding to preserve health care programs and avoid the shutdown. Trump later cancelled the meeting with the belief that not much would come out of it. “After reviewing the details of the unserious and ridiculous demands being made by the Minority Radical Left Democrats in return for their Votes to keep our thriving Country open, I have decided that no meeting with their Congressional Leaders could possibly be productive,” he posted to Truth Social. Trump last week told federal agencies to begin preparing for mass firings if Congress cannot agree on a deal to avert a shutdown. This would mark a new precedent of firing federal employees, who are normally furloughed in such cases. With not much time until the looming gover

Politics
Labor government delivers lower than expected deficit
The federal government recorded a smaller-than-expected deficit of A$10 billion for the 2024-25 financial year despite a sharp increase in spending. This is an improvement on the previously predicted A$27.9 billion deficit. Jim Chalmers said in dollar terms, the current Labor government has made more progress in the budget in three years than any other government in history. “We’ve turned two big Liberal deficits into two substantial Labor surpluses in our first two years, significantly reduced the deficit in our third year, and continued to pay down debt,” he said in a statement. “Today’s figures show that the deficit in our third year is around a fifth of the forecast we inherited from the Coalition, and around a third of the forecast before the election earlier this year.” The statement also said that Labors three Final Budget Outcomes have delivered a cumulative underlying cash balance of A$28 billion compared to the A$181 deficit inherited from the previous government. “The budget is in much better nick because we’ve paid down almost $200 billion of Liberal debt, demonstrated spending restraint, overseen the creation of more than 1.1 million jobs and got real wages growing again,” Chalmers said. This places
Politics
US workers face fixed cuts in Trump, Senate standoff
The Trump administration has escalated its standoff with Senate Democrats, threatening to permanently axe another 100,000 federal workers if the government shuts down next Tuesday. The Office of Management and Budget has directed departments to prepare reduction-in-force plans for programs inconsistent with presidential priorities and would involve permanent elimination rather than temporary displacement. It's a significant departure from traditional shutdown procedures where staff are typically furloughed temporarily.Setting in stoneThe White House plans to slash a net of 107,000 positions at non-defense agencies next fiscal year, building on the 300,000 civil servants already expected to depart by year's end. Around 154,000 personnel have already accepted buyouts and are scheduled to drop off the U.S. government's payroll on September 30. During Trump's first term, the record 35-day shutdown of 2018-2019 involved traditional furloughs of roughly 800,000 staff who later received back pay once funding resumed. Senate Democratic leader Chuck Schumer condemned the approach as "mafia-style blackmail", while Maryland Senator Chris Van Hollen called it intimidation tactics against “dedicated public servants who have noth
Politics
Trump redirects foreign aid to America First agenda
A document sent to Congress reveals the Trump administration's plans to shift US$1.8 billion (A$2.72 billion) in foreign aid funding towards “America First”, including pursuing investments in Greenland and countering “Marxist, anti-American regimes” in Latin America. "The national security interests of the United States require that the United States utilise these foreign assistance funds to meet new challenges in ways that make America safer, stronger, or more prosperous," according to the Congressional Notification reviewed by Reuters. The Washington Post first reported on the administration's funding programs previously authorised by Congress. President Donald Trump has been continually pursuing a massive overhaul of foreign resistance since he started his second term in January. The strategy is a departure from the long-held assumption that food, medical and economic assistance is an important "soft power" component of U.S. global influence. The document dated 12 September by the Trump administration said the $1.8 billion would be obligated for programs to “strengthen U.S. global leadership” to focus on several areas central to the Trump administration. This includes diversifying critical mineral supply chain
Politics
Trump cancels meeting ahead of government shutdown
United States President Donald Trump has cancelled a planned meeting with top Democrats in Congress as a government shutdown continues to loom. The meeting was planned to take place before the 30 September deadline for Congress to pass a funding resolution to keep the federal government operating. Trump has since taken to Truth Social to announce that he would be cancelling the meeting. “After reviewing the details of the unserious and ridiculous demands being made by the Minority Radical Left Democrats in return for their Votes to keep our thriving Country open, I have decided that no meeting with their Congressional Leaders could possibly be productive,” he posted. “I look forward to meeting with you when you become realistic about the things that our Country stands for.” The meeting cancellation increases the likelihood of a government shutdown. Senate Democratic Leader Chuck Schumer and House Minority Leader Hakeem Jeffries requested the meeting to discuss funding to preserve health care programs and keep them running beyond the 30 September program, and to avoid a shutdown. Both Schmuer and Jeffries have criticised Trump for cancelling the meeting. “Trump Always Chickens Out. The extremists want to shu