CSPAN - Speaker Johnson on Day 10 of Government Shutdown

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Oct. 10, 2025 10:04-11:31 - CSPAN

01:26:50

Speaker Johnson on Day 10 of Government Shutdown

Transcriber: nvidia/parakeet-tdt-0.6b-v2, sat-12l-sm, and large-v3-turbo Source

Participants

Main

hakeem jeffries

rep/d 08:27

michael barr

37:56

mike johnson

rep/r 12:13

Appearances

bryan steil

rep/r 02:04

dasha burns

politico 01:38

gwen moore

rep/d 00:33

steve scalise

rep/r 04:16

tom emmer

rep/r 02:45

Clips

greta brawner

cspan 00:22

kevin frey

msnow 00:20

Large

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Speaker	Time	Text
Eight Shutdown Votes 00:15:18
greta brawner ▲ ● ▼		We heard from your leadership that said Democratic lawmakers stuck around.
gwen moore ▲ ● ▼		We stuck around.
		I have plenty of reservations.
		I'm going home today, Friday.
		I have plenty of reservations to come back next week.
		They have not canceled votes next week yet.
		So that gives me hope.
		I think, you know, faith is a real big part of this.
		But again, I'm a duly elected member of Congress.
		And I want some say in whether or not 15 million people are going to lose their health care.
greta brawner ▲ ● ▼		All right, Congresswoman Gwen Moore, Democrat of Wisconsin, thank you for the conversation as always.
gwen moore ▲ ● ▼		Thank you, Greta.
gwen moore ▲ ● ▼		Always good.
greta brawner ▲ ● ▼		And we will stay with Capitol Hill, Speaker Mike Johnson, holding a news conference today on day 10 of the government shutdown live coverage here on C-SPAN.
mike johnson ▲ ● ▼		Today marks the first day federal workers across America will receive a partial paycheck thanks to Democrats' obstruction to the system here.
		This is the last paycheck that 700,000 federal workers will see until Washington Democrats decide to do their job and reopen the government.
		Starting next week, American service members, many of whom live paycheck to paycheck, are going to miss a full paycheck.
		If Democrats don't end this shutdown by Monday, then that October 15th date will pass us by.
		You've got millions of American families who will now have to figure out how to make their mortgage, how to cover their rent, pay the car note, keep food on the table, because Democrats, Chuck Schumer, and his colleagues in the Senate are here playing games.
		Republicans have voted over and over to end this madness and reopen the federal government.
		We did our job.
		By way of reminder, the House passed a clean, nonpartisan CR three weeks ago today to keep the government funded and by extension to pay our troops and TSA agents and Border Patrol agents and air traffic controllers and the rest of our federal workforce.
		We had that vote three weeks ago.
		And since then, Senate Democrats have voted repeatedly to keep the government closed.
		In the Senate, they have now voted seven times to block paychecks for 2 million federal civilian workers and 1.3 million active duty military men and women.
		Now I want to be very specific so that everybody in America can clearly cut through the obstruction and understand exactly who is to blame for this chaos.
		In fact, would you bring me that chart just real quick?
		I just want to point this out.
		Let's just make clear.
		This is the votes to pay troops and federal workers.
		This is the number of times that the vote has been done.
		September 10th, the GOP in the House voted to pay the troops and pay all these federal workers.
		The Senate did it on September 19th, September 30th, again on October 1st and 3rd and 6th and the 8th and the 9th.
		Every single time the Republicans voted to pay the troops and federal workers and every single time the Democrats voted not to.
		That is the record.
		They'll continue to put this bill on the floor.
		It'll be on the floor again next week in the Senate.
		And we'll see how many times they want people to go without paychecks.
		The Republicans are not playing games here.
		We sent a very clean, simple CR.
		You see this.
		Thank you so much for that.
		We are doing the job in making sure that the American people are taken care of.
		But judging by their behavior right now, the Democrats don't appear to be in any rush to end this pain.
		There's some headlines I brought you this morning.
		I just want you to hear what's being said about this.
		CNN headline from yesterday, quote, Democrats say even missed paychecks for U.S. troops won't be enough to end the shutdown alone.
		For many of them, this is about showing a fight to President Trump.
		They have to show a fight against Republicans so they can appease who?
		The far-left base of their party.
		It is shameful.
		And for what?
		Chuck Schumer, the architect of this shutdown, is trying to bow to the Marxist wing of his party.
		You heard him yesterday.
		He said in his own words, every day of the shutdown, he said, quote, gets better for us.
		Better for who, Chuck?
		For the Democrats and the Senate?
		So you can bow to the Marxist base and not get a challenge.
		Here's another headline from Politico yesterday, quote, Chuck Schumer's critics are satisfied.
		Yeah, the far left base, the party is satisfied.
		They don't mind the troops go without pay and civilian workers are furloughed.
		They don't care.
		Former DNC chair David Hogg, he heaped praise on Chuck Schumer as well.
		This is what Chuck Schumer was after.
		This is what he desires.
		The praise from the far left.
		David Hogg said, quote, give credit where credit's due.
		This is a big step up.
		A big step up.
		While you're delaying flights, while you're making people go through this pain.
		The co-founder of the far left group Indivisible said this yesterday publicly, quote, Chuck Schumer hasn't surrendered yet.
		I call that progress.
		There's one inescapable fact.
		It's a glaring fact that everybody in America can see.
		Chuck Schumer is hurting real Americans for his own political survival.
		I'm going to say that again.
		Chuck Schumer is hurting real Americans for his own political survival.
		If you're a service member who's not getting a paycheck, it's because Chuck Schumer has to appease the Marxists.
	Cut and simple.
	It's plain and simple.
	Shame on you, Chuck, every Senate Democrat who's going along with this.
	You lack the moral fortitude to do the right thing.
	This is the first time in history, the first time in the history of the United States Congress, that a party has shut down the government over a clean CR.
	We frankly didn't expect this.
	We sent over a no-frills, 24-page document to keep the lights on, keep Congress working, to keep the paychecks flowing.
	And they stopped it because they're afraid of the far left.
	I'm just going to walk through a quick sample of the devastating impacts that Americans are feeling as we speak right here, because this is real.
	And you'll note a theme here.
	A lot of these are blue states, where their Senate Democrats are over here keeping the government closed.
	In California, home of the nation's largest civilian workforce, more than a quarter of a million federal workers are now working without pay.
	Both the Democrat senators, Padilla and Schiff, have now voted seven times to block those paychecks.
	In Virginia, there are 189,000 federal employees, nearly 5% of the state's workforce, that are waiting on their next full paycheck.
	And both of their senators, Warner and Kaine, refused to pass a clean bipartisan CR that Democrats supported 13 times under Joe Biden in the previous four years.
	In Maryland, Maryland is a hub of trade and commerce.
	You have 150,000 federal workers there.
	Both of their senators, also Brooks and Van Holland, have voted seven times to keep the government closed.
	In Georgia, home to our nation's busiest airport, there's close to 110,000 federal workers, including thousands of TSA agents and air traffic controllers, now being forced to work without pay.
	You guessed it.
	Senators Ossoff and Warnock voted to block those paychecks too.
	Arizona, 58,000 workers serve the federal government, including many Border Patrol agents who are working hard to keep us safe.
	That hasn't stopped Arizona senators Kelly and Gallego from blocking funding seven times for the paychecks for their own constituents.
	In fact, they have so much idle time they're having publicity stunts, posing publicity stunts outside my office.
	In New York, let's talk about New York because this is interesting.
	It's the home to both of the Democrat leaders, both in the Senate and the House.
	115,000 federal workers are waiting on Hakeem Jeffries and Chuck Schumer and Kristen Gillibrand to come to their senses and end this shutdown.
	Chuck Schumer said himself, with every day of the shutdown gets better for us.
	And what does that look like?
	We're talking about 2 million civilian workers, 1.3 million active duty service members, everybody being hurt because of it.
	Chuck is what they're doing right now.
	I've been asked many times in the interviews the last couple days, you seem angry, you don't get angry a lot.
	I don't, but this is beyond the pale.
	What Chuck Schumer is doing right now, it's sickening.
	It's sickening to hear him say it's better for him and his party when it's so terrible for real Americans.
	Millions of people are experiencing real pain because of these political games.
	And you'd think after 44 years in Congress, Chuck Schumer would know better.
	But it seems apparent now that he spent too long in Washington to understand the real pain of real people.
	We're going to share a few more things with you about this this morning and to talk about some of the real world impacts on federal law enforcement.
	We've asked our House Committee Chairman, the Chairman of our House Administration Committee, Brian Stile, to come and talk a little bit more about that.
	So, Chairman Style, thanks for being here.
bryan steil ▲ ● ▼		Thank you very much, Mr. Speaker.
		Thank you for your leadership.
		Chuck Schumer yesterday said every day gets better for the Democrats.
		That's certainly not true for the men and women in blue.
		Today is the first day that the men and women of law enforcement here in the United States Capitol, U.S. Capitol Police, are not receiving pay that they earned since the beginning of the Chuck Schumer shutdown.
		As this continues, the chaos and consequences of the Schumer shutdown continue to build.
		Yet the men and women in law enforcement are asked to go out and serve and protect us every day.
		Chuck Schumer and Kim Jeffries will maintain a security detail men and women that aren't being paid because of Democrats' decision to shut down the federal government.
		I chair the Committee on House Administration work closely with the men and women of the United States Capitol Police, and they're suffering the consequences of the Schumer shutdown today.
		It's particularly concerning in a period of time when political violence is on the rise.
		Senate Democrats have voted to shut down the federal government seven times.
		That's seven times to defund our police.
		I'd ask Chuck Schumer if it's getting better for the men and women of Border Patrol who are on the border securing the United States of America.
		I'd ask them if it's getting better for the United States Marshals, who are doing incredibly dangerous work on behalf of our country in every state.
		I'd ask him if it's getting better for the United States Secret Service, who's protecting the President of the United States.
		Chuck Schumer has put politics over people.
		It's getting better for his politics, he thinks.
		It's not better for the people of the United States of America.
		We should be standing with the men and women of law enforcement who are doing their job to protect us.
		And I think it's incredibly unfair and unjust that the men and women of Capitol Police have not received the money that they earned since the start of the Chuck Schumer shutdown.
		With that, I want to introduce our leader, Steve Scalise.
steve scalise ▲ ● ▼		Well, thank you, Chairman Stahl.
		And as the Speaker pointed out, too, it's disgraceful that not only are we in this shutdown because Chuck Schumer is only concerned about appeasing the most radical elements of his base, but time and time again, seven times now, you've had other Senate Democrats join in with him to keep the government closed.
		And they're feeling some pressure, but what they're trying to do now, both Democrats in the House and Senate, is trying to shift the blame away.
		While they're voting to shut the government down, they're trying to blame other people.
		Let's be clear, and the speaker showed it.
		We've had actual votes on the House floor to keep the government open.
		We've had those same votes on the Senate floor.
		You can see who has been voting to pay our troops, who has been voting to pay our TSA agents, our Border Patrol agents, and who are those people that are voting to shut it down, to deny pay to our troops.
		It's crystal clear.
		And you can go see the voice votes, the record votes.
		Members of Congress, House and Senate, have actually cast votes over and over again on whether they want to keep it open or shut it down.
		You don't have to wonder about a blame game.
		Gee whiz, both sides are blaming the other side.
		Just go look at the votes.
		There have been actual votes in the House and the Senate eight different times now between the two chambers to open the government down.
		And Republicans have said, yes, let's keep the government open while we negotiate our differences.
		And Democrats continue to say no so they can appease their radical base.
		And so as Chuck Schumer denies pay to millions of federal workers, we know roughly at least one in three of every service member in America lives paycheck to paycheck.
		Now, should they get solace in knowing that they're risking their lives, some of them overseas, while their families are here.
		And on Monday, when we get to the date where paychecks would be cut, the government will still be shut down and they won't even be getting a paycheck on the 15th.
		Rent will still be due.
		Mortgages will still be due.
		Car notes will still be due for those service members risking their life.
		Should they take solace in knowing that at least it's a good day for Chuck Schumer?
		At least Chuck Schumer feels like the shutdown's working good for Schumer.
		That's not going to give solace to any of those families.
		Instead, it actually increases the anger of the families all across America who are seeing the real cost of this shutdown.
		They know who's voting to shut the government down, but now they're feeling direct pain.
		And the only thing they hear from Democrat leaders that keep voting no is, oh, it's a good day for us because the far left is patting us on the back?
		Do they really need a participation trophy to feel good about themselves while they inflict pain on millions of people?
		It's disgraceful.
		And as the Speaker pointed out this morning, one of the other things that's being reported now is that one of the dates it looks like they're holding the government hostage over is the 18th of the month, where they're having this hate America rally in Washington.
		And Democrats want to keep the government shut down to show all of those people that are going to come here and express their hatred towards this country, that they're fighting President Trump, that they're keeping the government closed as if it's something to be proud of.
		They ought to be ashamed.
		If they had any shame, they would come back, they would open up the government, and then we can negotiate our differences, which are very, very large on a lot of these issues.
Tom Emmer's Dilemma 00:10:08
steve scalise ▲ ● ▼		But in the meantime, we all know who's doing this.
		The votes are crystal clear.
		The public can go see who's voting to keep the government open, who's voting to shut it down.
		Chuck Schumer and his Democrat colleagues who are doing this need to look themselves in the mirror and start working for the American people instead of being so concerned about appeasing their far-left radical base.
		With that, our whip, Tom Emmer.
tom emmer ▲ ● ▼		I'm going to go back to Chuck's words again.
		Quote, every day gets better for us.
		You reopen the government and we lose our leverage.
		The point of this shutdown is not just suffering for suffering's sake, but to make a point.
		These are actual quotes from Chuck Schumer and Senate Democrats over the last week.
		You don't have to take our word for what their motivations are in shutting down the government.
		They are spelling it out for you and all of us.
		This is about one thing and one thing only, to score political points with the terrorist wing of their party, which is set to hold, as Leader Scales just commented on, a Hate America rally in D.C. next week.
		And they've forced military families, air traffic controllers, border patrol agents, farmers, veterans, TSA agents, and federal workers to pay the price.
		We're now on day 10 of the Democrat shutdown.
		Senate Democrats, including Senator Tina Smith in my home state of Minnesota, have had seven opportunities to reopen the government, but they've refused every single time.
		Consequently, Americans across the country are experiencing flight delays.
		In a matter of mere days, 11,000 Minnesota National Guardsmen won't get paid.
		Federal workers are being forced to figure out how they're going to put food on the table for their families, just so the Democrats can maintain their leverage to make a point.
		It's despicable, it's disgusting, and it should be disqualifying.
		With election season right around the corner, I hope every single American is taking note.
		Republicans have done our job.
		Democrats, on the other hand, are only here to play politics, and they're willing to hang their constituents out to dry to do it.
		And with that, I'll turn it back to our speaker.
mike johnson ▲ ● ▼		Thank you, Whip Emmer.
mike johnson ▲ ● ▼		Take a few questions this morning.
unidentified		I know your position.
		I'm not saying it's on the Senate.
		They have to take our bill that would reopen the government.
		But haven't the circumstances changed?
		And because there's a dire emergency, as Mr. Style talks about the Capitol Police, we all talk about the military, to say we should do something different here.
		We're still going to apply our pressure on the Senate.
		But, you know, if you're in the middle of a ballgame and the strategy changes, you're behind, or somebody gets hurt or something like that, the coach calls in different play.
		Why not call in a different play right now?
mike johnson ▲ ● ▼		Well, the ballgame analogy doesn't fit here because we weren't playing a game.
		We sent over a clean CR, and I've explained this many times.
		If there was some Republican priority or poison pill or gimmick or trick or something that I could pull off the CR in order to negotiate with Democrats, I would have already done it.
		It's not there.
		When I say we're operating in good faith, I mean it.
		We sent over a totally clean measure that they had already voted for before.
		In fact, that Chuck Schumer gave impassioned speeches as recently as March of this year.
		The same instrument, the same one that he said was the right thing to do and that it must be done so Americans don't feel harmed.
		He said that earlier this year.
		So we sent him the same instrument, assuming, hoping, of course, believing that they would do what has always been done here and pass a clean CR.
		And they did.
		And so I don't have anything to negotiate.
		There's nothing more for me to do.
		I literally don't have a card that I can take off the deck because we did it all in good faith.
		They are the ones politicizing this.
		They're trying to play a game.
		We're not engaging in a game.
		We're trying to get the government open again so that people can be served.
		And it's plain and simple.
unidentified		Chad's question, though.
		Hasn't the state of the play changed here, though?
		Isn't it perhaps the responsible thing to do to pass some kind of legislation to pay troops, to pay for the government?
mike johnson ▲ ● ▼		We did that.
		We passed the bill.
		We have voted eight times.
		Republicans have voted eight times to pay the troops, to pay the civilian workforce, to pay TSA agents, Border Patrol, air traffic controllers, and all the rest.
		We've done it.
		The Democrats have voted no every time.
		There is no other instrument to do it.
		It's called a CR to keep the lights on and the doors open so that Congress can do its work, so that, as the leader Scalise said, so that we can do all the rest of the negotiation and deliberation on all these other issues.
		Open the government, Democrats.
		That's what this is.
		We have voted so many times to pay the troops.
		We've already done it.
		We did it in the House three weeks ago.
		The ball is in the court of Senate Democrats right now.
		That's it.
unidentified		In terms of strategy, if you could speak to your strategy on keeping the House out in their districts and any idea when they may come back.
mike johnson ▲ ● ▼		This is not a strategy call to keep the House working in their districts right now.
		There's an urgent necessity of it.
		We had a conference call yesterday with House Republicans.
		They're fanned out across the country.
		They're in their districts trying to help their constituents because so many of them are now struggling because of the Democrats' games.
		So they're helping, for example, rural hospitals to access the funds that we got signed into law July 4th, $50 billion rural hospital fund, so they can provide for health care for their constituents.
		They need to know how to navigate that before Chuck Schumer and the Democrats try to take it away.
		Their counterproposal CR would spend $1.5 trillion and take away the $50 billion that we passed into law just on July 4th, signed into law by President Trump, to prop up rural hospitals.
		Who cares about health care here?
		Okay, our members are out working diligently in their districts serving their constituents right now.
		We will come back here and get back to legislative session as soon as the Senate Democrats turn the lights back on.
		That's the fact.
		That's where we are.
		Yes, ma'am.
unidentified		On the military pay, though, in past shutdowns, there have been ways to guarantee that members of the military get paid.
unidentified		There are over 100 Republicans in your pockets who have signed on to a standalone bill to pay these military members.
mike johnson ▲ ● ▼		So at what point do you want to go?
		Every single Republican is not just talking about paying troops.
		We have already had those votes.
		We have done that.
		We did it three weeks ago.
		The executive branch, the president, is working on ways that he may have as well to ensure that troops are paid.
		The Republican Party stands for paying the troops.
		The Democrats are the ones that are demonstrating over and over and over now eight times that they don't want troops to be paid.
		This could not be any simpler than it is.
		Look at the record.
		Don't listen to what these Democrat politicians are saying up here.
		Look at how they're voting and demand that they do the right thing.
		That is where we are, and that's where it'll be.
unidentified		Yes, ma'am.
		I actually have a question for Whip Emmer.
		Mr. Ebert, I know the White House announced last week that they were going to rescind $7.5 billion in green energy funds.
		They went to a number of states.
		It includes your district.
		However, Excel Energy Services is on the line to lose $7 million if this funding is rescinded.
		What conversations have you had with the White House about this?
dasha burns ▲ ● ▼		And what is your expectation for this funding?
unidentified		Is it truly gone or is there some way to get it back?
tom emmer ▲ ● ▼		Well, this is going to affect the Speaker.
		This is going to affect the Leader.
		This is going to affect our Chairman, Representative Steil, and all of our members.
		Literally, this could end today.
		If Chuck Schumer and Democrats would reopen the government, this wouldn't be an issue.
		And what's happened is the White House has to make some very serious and difficult decisions as to what's essential and what's not.
		If you want to end it, Chuck Schumer, reopen the government.
unidentified		So, Speaker, your understanding is the White House will continue with that funding when the government reopens?
tom emmer ▲ ● ▼		I would suggest that you call Tina Smith and ask her why she wants to keep the government shut down and put all this at risk.
unidentified		Is there a breaking point, like two paychecks missed, three paychecks, four paychecks, where you all change your strategy and say we're going to bring House Republicans back and negotiate before the government's reopened?
mike johnson ▲ ● ▼		I would like you to ask that identical question to Chuck Schumer.
		We have done the work in the House.
		We are awaiting them to do theirs.
		This is a two-body, two-chamber legislative body.
		Okay, the House did its work.
		The House and Senate Republicans have repeatedly affirmed that.
		You saw the chart eight times now.
		They have voted to get the government open and get troops paid and federal civilian workers paid.
		Democrats have dug their heels in and said no, over and over.
		They're the ones blocking the checks, not Republicans.
		All these questions should be directed to them and not to us.
		That is how this works.
		Thank you all for being here.
unidentified		And we'll have more live coverage of events today on C-SPAN coming up in about 45 minutes.
		Expecting to hear from House Democratic leader Hakeem Jeffries, holding a press conference on this 10th day of the government shutdown.
		Then Attorney General Pam Bondi will talk about efforts to prevent political violence, joined by the U.S. Attorney for the Middle District of Florida and other federal, state, and local law enforcement officials live from Tampa.
		And later this afternoon, President Trump will make an announcement from the Oval Office scheduled for 5 p.m. Eastern.
		You can watch live on C-SPAN, online at c-span.org, and on our free video app, C-SPAN Now.
Tonight's Ceasefire Premier 00:04:17
unidentified		C-SPAN, Democracy Unfiltered.
		We're funded by these television companies and more, including Cox.
		When connection is needed most, Cox is there to help.
		Bringing affordable internet to families in need, new tech to boys and girls clubs, and support to veterans.
		Whenever and wherever it matters most, we'll be there.
		Cox supports C-SPAN as a public service, along with these other television providers, giving you a front-row seat to democracy.
		Tonight, tune in to C-SPAN at 7 p.m. Eastern for the premiere of Ceasefire, our new weekly series.
		We bring two leaders together from opposite sides of the aisle for a bipartisan dialogue on the top issues facing the country.
		Ahead of tonight's debut episode, we met up with Politico White House Bureau Chief and Ceasefire host Dasha Burns for a preview.
dasha burns ▲ ● ▼		All right, come on in.
unidentified		Let's check out this.
dasha burns ▲ ● ▼		It looks a little different.
unidentified		Yeah.
dasha burns ▲ ● ▼		So this is where the magic happens.
unidentified		All right.
dasha burns ▲ ● ▼		The red, the blue, the arrows, coming to the middle.
dasha burns ▲ ● ▼		Carpet even color-coded here.
unidentified		Nice.
dasha burns ▲ ● ▼		So yeah, this is the ceasefire.
unidentified		This is it.
dasha burns ▲ ● ▼		This is it.
unidentified		7 p.m. debuts tonight.
dasha burns ▲ ● ▼		That's right.
unidentified		Who are the guests?
unidentified		All right.
dasha burns ▲ ● ▼		We have for our inaugural episode former Republican Vice President Mike Pence and Ram Emmanuel, obviously a Democrat, former chief of staff to Obama, former ambassador, and former Chicago mayor.
		But guess what?
		They actually both served in Congress together for six years.
		They were neighbors in their offices.
		And they've got, so they've got some history.
greta brawner ▲ ● ▼		What should our viewers expect from tonight's episode?
dasha burns ▲ ● ▼		They should expect some hearty debate because obviously they don't agree.
dasha burns ▲ ● ▼		But what we've gotten our guests to commit to is civil dialogue to try to see each other's perspectives and to bring a little charm, a little zest for us.
unidentified		You talked about the set, but is there some symbolism here with these arrows?
greta brawner ▲ ● ▼		What should viewers read into this?
dasha burns ▲ ● ▼		Well, you know, I considered wearing a purple suit.
		I decided not to, but a little too on the nose.
		But red and blue together, pointing towards the middle, trying to find some common ground, trying to see where they might agree, where they might, I don't know, maybe even illuminate a new perspective for each other.
		We're going to talk about news of day.
		We're going to talk about big picture.
		Sure, there's, of course, a lot that's happened this week that both is uniting and dividing our country.
		So, we'll get our guests on all of that.
		And we've got Sean Spicer and Fez Shekir, Bernie Sanders advisor and former campaign manager on the show as well.
unidentified		All right.
unidentified		Well, good luck.
dasha burns ▲ ● ▼		Thank you so much.
unidentified		Premiering today at 7 p.m. on C-SPAN, Obama White House Chief of Staff Rah Emanuel and Vice President Mike Pence once colleagues in Congress sit down together for this episode of Ceasefire, hosted by Politico's White House Bureau Chief Dasha Burns, Ceasefire, Bridging the Divide in American Politics, where the shouting stops and the conversation begins.
		Two leaders, one goal, to find common ground only on C-SPAN.
		This holiday weekend, join C-SPAN for the most comprehensive America 250 coverage of the U.S. Navy's 250th anniversary celebration.
		The Navy 250 Gala at the National Constitution Center in Philadelphia.
		A star-studded Victory at Sea concert on Independence Mall, including actor and retired Marine Rob Riggle as MC, Patty LaBelle, the elite Marine Corps band, and others.
		A commemoration of the Navy's founding, including a Blue Angels flyover, the U.S. Navy's 250th anniversary celebration this holiday weekend, only on C-SPAN, official media partner of America 250.
Pce Inflation And Labor Supply Risks 00:15:24
unidentified		Federal Reserve Board Governor Michael Barr discussed the state of the U.S. economy, highlighting inflation and consumer spending during an event hosted by the Economic Club of Minnesota.
unidentified		From Minneapolis, this is just over 50 minutes.
michael barr ▲ ● ▼		I want to thank the Economic Club of Minnesota for the opportunity to speak with you.
		I also was very happy to learn that the Economic Club sponsors young people to come be part of this program who are in college or in university early in their studies getting involved in issues of the day.
		So I really applaud the Economic Club of Minnesota for that work.
		I'm also happy to be here for a number of reasons, one of which is that I have roots in Minnesota.
		My grandmother was born and raised in Eveleth, Minnesota, where we had some Eveleth natives, where her parents came to Minnesota to run a small clothing store that they opened in 1906 to serve the growing population that came here in the iron ore mining boom of that era.
		And, you know, that generation's hard work and dreams of a better future helped build this great state, as well as this prosperous economy that this club and the Federal Reserve are both dedicated to fostering.
		So it's a pleasure to be with you here for that reason as well.
		We are midway between the last meeting of the Federal Open Market Committee and our next meeting at the end of this month.
		At our last meeting in September, we decided to reduce the policy rate by 25 basis points, a decision I supported.
		My FOMC colleagues and I also updated our projections for the economic outlook for the next couple of years and gave our assessment of the likely appropriate policy rate path as economic conditions evolve.
		In my remarks today, I will share my own thinking related to those decisions last month and how incoming data and other developments have subsequently shaped my views as we head into the FOMC's meeting in the next few weeks.
		That includes the economic implications of various developments in Washington, including the federal government shutdown, which I imagine is on the minds of at least some of you today.
		We are currently in a challenging position because the risks to both sides of the FOMC's mandate, employment and inflation, are elevated.
		I agree with Chair Powell's succinct view that there is no risk-free path forward for monetary policy.
		While inflation has come down a great deal since 2021, it is still above our 2% target and is now rising.
		And although several data points indicate that the labor market may be roughly in balance, We also know there has been a sharp drop in job creation since May, which suggests risk to the labor market going forward.
		The most difficult circumstances for making monetary policy decisions are when both mandate variables are at risk.
		Let me start with inflation.
		The latest data show that 12-month headline inflation based on personal consumption expenditures, or PCE, rose again in August to 2.7%.
		Core PCE inflation, which has historically been a good guide to future inflation, was 2.9%.
		After falling from its high of 7.2% in mid-2022 to 2.3% in April of this year, PCE inflation has been rising since then.
		That timing is no coincidence.
		Research by the Federal Reserve Staff and others indicate that the increase in inflation since April has likely owed largely to the sharp increase in tariffs that kicked in around that time.
		There are various measures of the overall level of tariffs.
		For assessing how tariffs are affecting inflation, I find it helpful to look at tariff collection relative to imports, which gives us a measure of the real effective tariff rate paid as goods come into the country.
		This rate has risen sharply this year, reaching about 11% in August and is likely to rise further in the near term.
		The tariff hikes have boosted core goods inflation, and at the same time, progress on core services inflation has stalled.
		I expect that core PCE inflation will end the year over 3%.
		The median FOMC participant estimates that headline PCE inflation will not return to our 2% target until the end of 2027, more than two years from today and six and a half years since inflation began rising in 2021.
		This would be the longest period of PCE inflation above 2% since a seven-year stretch that ended in 1993.
		I recognize that the economy and the American people have been hit by a series of unusual economic shocks in recent years.
		The COVID-19 pandemic and related shutdowns, disrupted supply chains for goods and labor shortages, higher energy costs from Russia's war on Ukraine, and the sudden increase in tariffs this year.
		Even so, after the high inflation Americans have endured, two more years would be a long time to wait for a return to our target.
		And that possibility weighs on my judgment for appropriate monetary policy.
		I am also concerned about future upside risks to inflation and inflation expectations.
		While the immediate effects of tariffs on inflation has been smaller than most economic forecasters had expected, the inventories built up in anticipation of the tariffs may have had a role in easing immediate impact, as have compressed profit margins.
		While that is good news for inflation, the corresponding bad news is that firms will eventually run down these inventories and will only be able to compress margins for a while.
		Many importers and firms affected by imports are reporting that they are waiting as long as possible to pass on the costs from tariffs to their customers, mostly by temporarily reducing profit margins.
		Normalizing margins over time implies a gradual but longer upward trajectory for inflation, a pattern of price increases that I fear could convince many consumers that higher inflation is going to be more of a permanent phenomenon.
		This is important because expectations of future inflation affect spending decisions in the near term and can drive a cycle of escalating inflation, as we saw after prices began rising in 2021.
		With that experience in mind, I am skeptical of assurances that we should fully look through higher inflation from import tariffs.
		While in principle tariffs are a one-time increase in prices and should not sustainably raise inflation, that may not be the case if prices keep rising month after month and affect expectations.
		There's been nothing one-time or predictable about these tariff increases, which have ratcheted upward this year on particular countries and particular sectors in a series of steps.
		At some point, businesses and consumers could start to make pricing, spending, and wage decisions based on their belief in higher future inflation, thereby driving a cycle of persistence.
		Measures of near-term expectations are down from peaks in April when tariffs were announced, but they are still higher than last year.
		As a result, I believe the Federal Reserve's price stability goal faces some significant risks.
		That said, there are some factors that mitigate these risks.
		In particular, the softer labor market could help keep inflation in check by making it harder for workers to bargain for higher wages, even if people expect their cost of living to increase, and by making it harder for businesses to fully pass through price increases to consumers.
		In addition, the more gradual effect on tariffs on prices has not, to date, led to the type of supply chain disruptions that can have pronounced second-round effects on inflation.
		Also, longer-term inflation expectations remain well anchored.
		So let's turn to the labor market.
		While we do not have the full complement of labor market data because the government shutdown has delayed the Bureau of Labor Statistics employment report, we do know that the payroll services firm ADP found that private sector employment shrank last month, in keeping with a slowdown in job creation since May.
		Part of the slowing surely reflects developments on the supply side from both reduced net immigration and somewhat reduced labor force participation.
		But it is unclear exactly how much.
		As a result, it is challenging to gauge exactly how much labor demand has softened.
		Growth in labor supply has declined significantly, with perhaps as many as a million fewer people in the workforce than would have been expected based on the typical pattern of immigration that prevailed in the years prior to the pandemic.
		With a reduced supply of labor, what constitutes a healthy growth rate for employment would be smaller.
		One can see that slower labor supply growth has been an important factor in weaker job creation, because over the period that job gains have slowed significantly, the unemployment rate has only edged up to 4.3%, a level typically associated with a sound labor market.
		Other measures suggest that labor supply and demand remain in the same rough balance they have been for more than a year.
		The ratio of job openings to the number of people looking for work is around one, the level that has persisted since about the middle of 2024.
		Likewise, the rate of people losing their jobs is running at the same rate that it has for the past two and a half years.
		And there is no sign of an impending jump in the unemployment rate in the weekly reports of new claims for unemployment insurance.
		That said, even if the labor market is still roughly in balance, the fact that this balance is being achieved from simultaneous slowing in labor supply growth and in hiring suggests the labor market is more vulnerable to negative shocks.
		In addition, despite the low and relatively steady unemployment rate, household perceptions of the labor market have deteriorated and are below the level they reached in the strong labor market immediately before the pandemic.
	According to the New York Fed Survey of Consumers, people's perceptions of their chance of finding a new job if they lost their current job fell sharply in August to the lowest reading since the survey started in June 2013.
	It rebounded somewhat in September, but remained at levels seen in 2013 when the labor market was weak.
	Also, components of the workforce that are usually an early indication of cyclical changes in the labor market have deteriorated.
	The unemployment rate for black or African American workers, which reached a historic low in 2023, is back to its highest level since the pandemic.
	Unemployment rates for younger workers are also up.
	One reason I take these signals seriously is that experience shows that when labor markets turn down, it can happen suddenly.
	With job growth near zero for the past several months, the labor market could decline precipitously if the economy is hit with another shock.
	Growth in gross domestic product has slowed significantly this year.
	However, earlier concerns of a continued slowdown seem to be fading.
	After a negative reading in the first quarter, real GDP grew at a 3.8% rate in the second quarter, smoothing through to a rate of 1.6% for the first half of the year.
	Strong spending and other data for the third quarter indicate that GDP remained strong last quarter.
	While I expect that tariffs and lower labor supply have weighed on growth and will continue to do so, I do not yet see significant risks in the growth data, though I remained attuned to risks from a variety of factors.
	It is hard to judge at this point, for example, whether the federal government shutdown will leave a noticeable imprint on economic growth, because we don't know how long it will last and whether it may result in sustained changes in government spending.
	Based on past shutdowns, it is most likely that a shutdown would reduce GDP growth in the quarter in which it occurs and then boost growth in the subsequent quarter by the same amount.
	As I said earlier, this economic outlook and the associated uncertainty that underlie it pose challenges for judging the correct stance of monetary policy, as well as the appropriate path forward, given that the risk to achieving both components of our mandate are elevated.
	With the easing in output growth and the likelihood of tariffs and labor supply weighing on the economy in the months ahead, we need to be prepared for the possibility that the softening in the labor market will become something worse, especially if there is a further adverse shock to demand.
	At the same time, inflation, which made steady progress last year towards the FOMC's 2% goal, has moved up in 2025, especially after the sharp increase in tariffs, which keep rising.
	I have laid out my reasons for believing that the so-far modest impact of tariffs on inflation probably means a much longer-lasting ratchet upward, potentially affecting expectations in a way that makes the job of taming inflation harder.
	In balancing and managing risks to the FOMC's goals, I supported the committee's decision on September 17th to lower the federal funds rate by 25 basis points.
	Monetary policy was and remains modestly restrictive, so it seemed to me appropriate to move the rate a bit closer to neutral, pending more data, further developments on the economy, the forecast, and the balance of risks.
	Since that meeting, we have learned that consumer spending has been on a notably stronger trajectory than previously indicated, leading most observers to revise up estimates of spending and GDP growth for the rest of the year.
	We also got confirmation that PCE inflation moved up as expected and that core inflation remains well above the FOMC's target.
AI's Impact on Economic Balances 00:15:39
michael barr ▲ ● ▼		Another development was the announcement of new tariffs on imports on heavy trucks, medicine, and furniture.
		There was and remains considerable uncertainty about the future course of the economy.
		It is possible that recent low payroll growth is a harbinger of worse to come, or that payroll growth eventually strengthens, consistent with a low unemployment rate and sound growth.
		It is possible that tariffs will have only a modest impact on the course of prices and that progress resumes toward 2% inflation next year.
		But it is also possible that both inflation and expectations of future inflation escalate.
		Common sense would indicate that when there's a lot of uncertainty, one should move cautiously.
		This is validated by past monetary policy experience and a particular research insight from nearly 60 years ago.
		The Brainerd principle developed by economist William Brainerd holds that when there is considerably uncertainty about the consequences of a policy action, the recommended course is to move more gradually than would otherwise be the case.
		I believe that principle applies now and that the FOMC should be cautious about adjusting policy so that we can gather further data, update our forecasts, and better assess the balance of risks.
		If we see inflation moving further away from our target, then it may be necessary to keep policy at least modestly restrictive for longer.
		If we see heightened risks in the labor market, then we may need to move more quickly to ease policy.
		The FOMC can, and I believe would, act forcefully to stabilize the economy if necessary.
		I think a cautious approach will help us to balance the risks to both sides of our mandate as we continue to assess the economic outlook.
		Thank you very much.
unidentified		Michael, that was great.
		Thank you.
		You know, when we have Federal Reserve speakers, I've got to see Michael's remarks in advance.
		And usually I look for a place where we fundamentally disagree and then we can argue about it.
		But I basically agree with everything you said.
		So we're going to go deeper into a few different topics and then turn it over to the audience to hear from them.
		So let's start with inflation.
		One of the comments, you talked about tariff inflation.
		I think that was very clear.
		You also commented that services inflation appears to have leveled out.
		It's not fallen as much as we would have expected.
		Curious, why do you think that is?
		Do you think that, because when I think about services inflation as tied to wage growth, wages continue to cool, yet services inflation has leveled out.
		Do you think that could be tariffs which hit goods spilling over into services?
michael barr ▲ ● ▼		I think it's early to tease out.
		I do think in some areas we know that tariff effects are directly related to services inflation.
		So, for example, if you look at auto repair, A big component of services inflation and auto repair are the goods inputs to those services.
		You need to buy the parts, and that goes into services inflation, even though the good is the thing going up in prices.
		So, there's some areas where there's a clear link.
		I don't think we're seeing kind of a generalized spillover into services, but it's hard to know for sure.
		In some areas of services inflation that we're seeing, we're seeing increases in what are called non-market prices.
		So, these are prices that are imputed from observed experience in the world.
		We don't directly measure them.
		And some of those come from the fact that the stock market has been so high, so you get much higher, those of you in the room who are in the investment advisory services know, you get much higher fees when the stock market goes up.
		So, that also gets picked up in these imputed prices.
		So, there are lots of little components you might be able to explain, but it's kind of our job to worry about the whole picture and not to try and pick apart each component and kind of explain it away.
		And so, that's why, you know, it is one of the areas that I think it's appropriate for us to watch.
		We were making significant progress on services inflation over the last few years, and that seems to have leveled out for right now.
unidentified		Great.
		And then, staying on the inflation topic for a moment, you commented that long-run inflation expectations appear to be anchored.
		We see this both in surveys of market participants and businesses, and we see it in financial market data.
		Why do you think they've been so anchored through this inflation episode, and how much comfort does that give you now?
michael barr ▲ ● ▼		Well, you know, well-anchored inflation expectations are absolutely critical for us to do our job.
		It's one of the things that makes monetary policy effective.
		And I will also say that one of the things that makes that long-term expectation so well-anchored is the credibility we have that we will perform as people expect, that is, that we will get inflation back to our 2% target.
		So, our credibility, our independence, and our independent judgment is critical to keeping long-term inflation expectations well-anchored.
		And those expectations, in turn, are really important for us in beating inflation.
		At the same time, as I noted in my speech, near-term inflation expectations are up, and those near-term inflation expectations can have an effect in developing additional inflation pressures in the economy.
		And so, we have to watch to make sure that those near-term inflation expectation increases don't bleed into longer-term changes.
		That's our job, and I think we'll do it.
unidentified		Right.
		So, let's turn to the labor market.
		I think you gave us a great summary of where it is.
		Do you think AI is affecting the labor market already?
michael barr ▲ ● ▼		Well, you know, I think AI is likely to have really quite profound effects on our economy over the medium to longer term.
		I think there are some effects now in the data for probably less than people think.
		My intuition in talking to people is that many people overestimate the effect of AI in the short term and at the same time underestimate its likely effects over the longer term.
		I do think you can see it somewhat in the data now.
		So, for example, some research has shown that younger people are having a harder time in the labor market, particularly in fields that are likely to be heavily impacted by AI.
		So that might be kind of an early indication that there's some labor market effect.
		And certainly anecdotally, if you talk to very large firms, There's a lot of substitution of labor going on in some cases where AI in call centers or in HR functions or in coding can play an important role.
		But most, I think, of what's going to happen with AI in the labor market is AI is going to be complementary to labor skills.
		And so we're likely to see over the long term that, yes, there'll be some jobs that disappear, but there'll be new jobs nobody's ever heard of that are created along the way.
		And overall, it's likely to significantly boost productivity in our society.
		And if you boost productivity, all of us are better off.
		We can grow together in a way that's better.
		And so I do think I am very optimistic at the long term, even if there's some short-term dislocations, very optimistic on the long term about the ways in which generative AI might improve the productive capacity of our economy.
unidentified		That's great.
		In your comments, you talked about how when people are responding to surveys, they're generally kind of gloomy.
		This has been a consistent trend for the last few years.
		People are feeling gloomy, but then they're spending.
		And I can confirm, so this weekend, the Minnesota Vikings played in London.
		I went to London, not in an official capacity, in an unofficial capacity, and it was full of Vikings fans.
		I mean, there were a lot of Vikings fans in that stadium.
		So at least Vikings fans were feeling optimistic, probably because they were playing the Cleveland Browns.
		So that was justified.
		But I'm curious, when you look at GDP activity, consumer spending, it's been surprisingly strong.
		Do you have any idea why it is that?
michael barr ▲ ● ▼		You know, it's really interesting, and you're right, Neil, if you look at the data, usually we can use models that have as one of their inputs, people's feelings about the economy, because that usually is quite well related to whether people are spending or not spending.
		But the last several years, that relationship has not held.
		People say that they're feeling bad, but as you said, they're going out and spending.
		So I do think there's something else going on in the sentiment data that's not related necessarily directly to economics.
		People's broader feelings about things in society may be influencing how they answer those survey questions.
		But the spending data has held up very well, surprisingly well.
		As I mentioned briefly in my remarks, you know, many outside forecasters have expected spending to decelerate quite significantly.
		And the data we get are going in the other direction on that.
		And GDP is being revised up.
		So there's a lot of resilience in the economy.
		Now, one thing that may be going on is we may be having an experience in which there are really two economies right now.
		One economy involves upper income people who are feeling really good about their situation, whose wealth holdings have been going up dramatically over the last few years.
		The stock market is very, very strong right now.
		And so that wealth effect may be buoying spending from the part of the economy that's doing really well.
		And at the same time, we're seeing low and moderate income households really struggling.
		And they have been struggling for some time.
		So we're seeing increased problems for low and moderate income families meeting their daily expenses, more families going to food banks, and more indications that there's stress on the balance sheet of low-income households in terms of increased default rates for particular kinds of credit access.
		So all these indications suggest that we may be seeing two economies operating at once.
		One, a high-income economy that is bolstering growth and buoy by the stock market, and another economy where there's a weaker labor market and people are kind of hurting.
		And that makes it very challenging.
unidentified		You know, another theory related to that that I've thought about, I'm curious your reaction.
		In monetary policy, there's a really important concept of the neutral interest rate, which is what interest rate neither stimulates the economy nor slows it down.
		And we don't know exactly what it is.
		We try to estimate it.
		When I've seen the GDP exceed expectations year after year, it made me wonder, well, maybe the neutral rate is higher.
		And what that means is our monetary policy is not pressing the break as much as I thought it was.
		I'm curious, have your views on the neutral rate evolved at all over the last few years?
michael barr ▲ ● ▼		They have, but just a very little bit, and maybe in a different way than what you just described.
		So, first of all, let me distinguish two things.
		One is, in our summary of economic projections, FOMC participants are asked to write down our long-term estimate of R-STAR, the neutral interest rate.
		And in my judgment, I try and take that very seriously.
		The question that we're asked is, over the long term, when the economy is in equipoise, when there are no demand shocks or supply shocks, when inflation is running at 2%, when the unemployment rate is at its natural rate, what is the natural rate of interest?
		And that for me has gone up a little bit, not much, and it's because I have a very bullish view about the productivity that generative AI is likely to produce for our economy over the long run.
		So that's gone up a little bit.
		There's a separate question, which is the one that you were really addressing, which is how restrictive is policy right now in this moment in relation to the economy?
		That's a very different question.
		The long-term R-STAR question is affected by very long-term changes in our society, demographics, the savings rate, and the like.
		The short-term question is a very different question.
		You're asking, given the way in which the economy is being affected by supply and demand shocks, given what's going on in financial markets and in financial conditions, given what's going on in the labor market, given what's going on with inflation, how restrictive is policy?
		It's a very different question.
		I think right now, our policy is probably modestly restrictive, even though if I were to take my long-run estimate, I would say it was quite restrictive.
		But given the shocks we're experiencing in the economy right now, I'd say it's modestly restrictive.
		And I think you can see that in lots of areas, including labor demand, which we've been talking about.
unidentified		That's great.
		Thank you.
		I've got two more questions, then we're going to open it up to the audience.
		The Federal Reserve's balance sheet, so we expanded our balance sheet during COVID to try to give, and following COVID, to try to give the economy a boost.
		For the last couple of years, we've been shrinking our balance sheet.
		That process is ongoing.
		There's ambiguity about how much further we have to shrink it before we shrink it too far.
		I'm curious, how do you see the balance sheet rolloff going?
		And are you worried that we might go too far?
michael barr ▲ ● ▼		Well, it's a great question.
		I think thus far, balance sheet runoff has gone quite smoothly.
		It kind of operates in the background.
		We've at a couple moments adjusted the pace at which we're doing that as we get closer to our goal of having reserves that are a little bit above AMPLE in the system.
		We've been adjusting the pace of that, but it's gone very, very smoothly.
		And we obviously monitor for conditions in financial markets to make sure it stays operating smoothly.
		One of the things that's really important as we feel our way towards AMPLE and get to that right level of reserves in the system is that we have really good ceiling tools in place so that if we see significant upward pressure on our rate because we've gotten too close, those ceiling tools can kick in and keep our policy rate where we want it to be.
		So the two policy tools, ceiling tools that we have are the discount window, which are broadly used in the banking system, and the standing repo facility, where many of the largest financial institutions in the country have contractual arrangements with us that they can engage in repo transactions with us.
Adding Morning Auctions to Repo Facility 00:00:59
michael barr ▲ ● ▼		And those two ceiling tools, if they're operating effectively, are ways of ensuring that even if we get a little too close, that rates stay effective and then we can adjust back to where a little above AMPLE needs to be so that we can maintain that.
		So having those really strong, effective ceiling tools is really critical.
		We've taken a number of technical steps to make sure that our standing repo facility is well functioning by, for example, adding a morning auction to that.
		My own view is that over the longer run, it would be really helpful to have the standing repo facility also centrally clear repo as a way of making sure it moves with the market.
		As the market moves to central clearing for treasury securities, we should also have that tool ourselves.
Please Introduce Yourself 00:02:47
michael barr ▲ ● ▼		So effective ceiling tools, monitoring the situation very carefully are both really important and so far it's gone well.
unidentified		That's great.
		That's great.
		Okay, so my last question is not a technical question.
		You've had this remarkable career in and out of public policy, beginning when, I think maybe it goes beyond that, but at least when you were a clerk for the Supreme Court Justice.
		I'm just curious for our young people in the audience, what led you to explore service as part of your career?
michael barr ▲ ● ▼		It's a great question.
		So I'll start with my parents.
		My parents were both very civically minded human beings.
		And my mom was an English teacher and taught in the DC public schools and then for students with psychiatric disabilities and then learning disabilities.
		And my father was a labor lawyer.
		He represented labor unions, the painters and the technical engineers and the bookbinders and a few other unions.
		Bookbinders are pretty small.
unidentified		I had not heard of that one.
michael barr ▲ ● ▼		Yeah.
		But the ethos that they brought to their work was very much a mission-driven ethos.
		And so when I came home and we'd sit around the dinner table, the values that they expressed were values of mission and service.
		And I think that very much influenced not exactly the path I took, but the orientation I had towards public service.
unidentified		That's great.
michael barr ▲ ● ▼		And then I was very fortunate to have, speaking to the young people, mentors early in my career who helped guide me on that path.
		So those of you who are in college or university now, the fact that you're here is a very good sign that you know that it's important to look out for opportunities.
		But finding mentors who can help guide you along the way is just really critical.
unidentified		That's great.
		Well, thank you.
		Why don't we open it up to the audience for questions?
		We've got microphones here, so raise your hand, please, on the microphone.
		Please introduce yourself when you speak.
		Hi, Scott Peterson.
		Thank you for coming today.
		My question has to do with the Supreme Court and the expectation that I think in November they're going to rule on whether the current administration had the unilateral authority to and the constitutional authority, frankly, to impose tariffs unilaterally without involving Congress.
		I'm curious if, in fact, they make that determination, what the impact will be on the economy, as well as more specifically on expectations around inflation.
Unexpected Consumer Spending Surge 00:10:09
michael barr ▲ ● ▼		Scott, it's a great question, but one that is wildly outside my lane.
michael barr ▲ ● ▼		And so I'm going to take a pass on answering it.
unidentified		Thank you for your comments.
		Really helpful to have your perspectives.
		You talked about the sort of unexpected stability in the labor market and the surprise in consumer spending.
		I think we all know that consumer debt passed the $18 trillion mark this summer.
		Is there any risk that consumer spending is fueled by debt we can't repay, and what are the consequences of that?
michael barr ▲ ● ▼		Yes, I mean, that is an area that we look at quite a lot, many of us individually, and certainly the staff teams at the Reserve Banks and at the board.
		You know, there's an aspect of this that is about households expanding their use of credit.
		But overall, household balance sheets are looking okay.
		So we're not seeing a kind of there are exceptions that I would say, we're not seeing overall a credit-fueled boom in the economy.
		There has been an uptick in defaults, particularly among low- and moderate-income households with respect to credit card balances and auto balances, subprime auto, and that's concerning and that's worth watching.
		The rate of increase recently has leveled off and seems to be flattening a bit.
		So it's an area to absolutely look out for in the process, but that's how I see things right now.
unidentified		Hello, Jeff Walsh.
		I'm the mayor of Plymouth.
		Plymouth also has the fourth largest economy in the state.
		We do a lot of manufacturing, mostly med tech, med device.
		So just a little plug and maybe why little GDP is going up.
		My question is: the Fed is always saying we're data-dependent.
		But if you look at the BLS and the jobs data they get, we all know businesses' responses to their employment jobs creation data has gone down precipitously since COVID.
		And it's down closer to 40%, I think, now.
		So, in the fact that last month they revised job growth by over 900,000 jobs fewer than what they had previously reported.
		So, how do you be data-dependent, make your decisions on input coming in at the same time the data is so unreliable?
michael barr ▲ ● ▼		Thanks.
		So, let me just say we pay attention to all the data that we get.
		We get data from a wide variety of sources.
		The Bureau of Labor Statistics data is really the gold standard of data.
		And the people working on that, I think, are quiet heroes of our economic world that we all live in, that you all rely on as policymakers and as businesses that we rely on at the Fed.
		The work they do is absolutely essential.
		It's true that survey response rates went down after the pandemic.
		The goal is to get them back up.
		It's not really a mystery.
		I've done survey research myself as an academic.
		You have to spend more money to get better response rates.
		So that the things that are needed to be done are not really rocket science.
		We need more investments in our basic data infrastructure, and then we can get response rates back up.
		The benchmark revision you described, for example, is a benchmark revision that the same people are doing.
		That is, the Bureau of Labor Statistics keep track of that all the time.
		And every quarter they know what's going on, and every year they decide to publicly update the number.
		But that number wasn't a surprise to us or to the Labor Department.
		We have built it into the work that we do, understanding what's going on into the economy, understanding how that affects our forecast.
		So the public may have seen that as a surprise, but it was not surprising to anybody who is working on the data.
		So we feel good about the data that we get.
		We use lots of public sector data.
		We also supplement that with private sector data that we benchmark against the government data.
		And that whole picture together gives us a good view on the economy.
		Now, obviously, right now, we're in a government shutdown.
		That has delayed some of the government data that we normally get.
		And because it is the gold standard data, we need to get that data.
		We want that data.
		And I'm hopeful that when the Congress and the administration work together and get the government going again, that we'll get that data in a timely way.
unidentified		While the microphone is going, I'll just add to that.
		I agree with everything that Michael said.
		We also, the Reserve Banks, but also the Board, do a lot of engagement with businesses and labor groups, large and small, to hear directly from them, what are you experiencing in your own community?
		And that gets added to the data that we look at to get a view of the economy.
michael barr ▲ ● ▼		Yeah, absolutely.
unidentified		My name is Tad Piper.
		I run an energy consulting firm called TWP Strategic.
		My question is related to two factors that are somewhat out of the ordinary: in that inflation right now is partially driven by tariffs and partially driven by energy cost, which makes interest rates seem like an imperfect means to try to stamp on it.
		It's not driven by necessarily consumerism.
		It's not driven by overinvestment.
		It's driven by somewhat external factors.
		So there is a question as to whether interest rates being high actually can solve inflation driven by tariffs and energy costs, which is probably driven in large part by underinvestment over 40 years as much as anything.
michael barr ▲ ● ▼		So it's a good question.
		So, you know, at the Federal Reserve, we have one basic tool.
		Our basic tool is to raise interest rates, to lower interest rates, or to keep them the same.
		And that tool is effective at controlling inflation over time, no matter its source.
		So if we need to use interest rates to raise rates to control inflation or to lower rates to keep the labor market going, we know how to use that tool and monetary policy works.
		So it is true that there are lots of different causes of inflation, but at the end of the day, the central bank, an independent, credible central bank, can get monetary policy to achieve its policy target.
		Hi, I'm Scott Jones with Merrill Private Wealth.
unidentified		We've seen debt levels, federal debt levels, rise tremendously, and I think they're at or close to record levels.
unidentified		If that trend continues, and a lot of experts don't see an end to that trend, how does that affect the Fed's view on monetary policy and inflation?
michael barr ▲ ● ▼		How might all that change over time?
unidentified		Thank you.
michael barr ▲ ● ▼		So let me, I'll be careful in how I answer your question.
		I'm not going to comment on current fiscal policy.
		That's the job of the administration and the Congress.
		But I will say something just about the long term.
		Over the long term, if government debt continues to rise in relation to GDP, that will put upward pressure on long-term interest rates, on long-term mortgages,
		because people will demand more because there's a risk that in the future inflation might be higher or demand for government securities might be lower given the amount of issuance that is required for a rising debt to GDP ratio.
		So that's just a fact.
		We sort of take those facts in the world as a given.
		And our job is to keep inflation in check, understanding that over the long term, people's perception of that concern might rise.
		So far, inflation expectations over the long term are well anchored.
		That means that the term premium that you're seeing at these longer ends are not so much about people's views about whether we can keep inflation in check, but about the extra risk that they might need to take on if they're wrong.
		And so far, the Federal Reserve, the Central Bank, has the credibility to keep those long-term inflation expectations in check.
		But as I said, it's a mutually reinforcing process.
		If we're able to behave credibly to do that, long-term inflation expectations remain well anchored.
		And if they're well anchored, our jobs are much easier.
		How about tapping some of our students out there?
		Don't be shy.
unidentified		We could call on them.
		Yeah.
		Yeah.
michael barr ▲ ● ▼		I could cold call on you.
unidentified		Michael, first of all, thank you for calling me a student.
		I don't get that very much anymore.
		So even though I have 36 monetary policy questions, I want to go back to your comment about mentors and share with us who were the mentors that mattered to you and what were your takeaway from those that leadership.
First Draft Crossed Out 00:02:16
michael barr ▲ ● ▼		That's great.
		I have too many as you'd expect to imagine, so I'll just say a few things about some different mentors.
		One mentor I had early in my career was Judge Pierre Laval, then of the Southern District of New York, who I clerked for right out of law school.
		And he taught me the importance of concision, among his many other skills.
		I remember the first draft, I came into his office with a draft of a memo that involved a very boring case of cross-motions for summary judgment on commercial real estate insurance.
		And I wrote a 17-page memo and I brought it into his office.
		It's my first thing I brought into him.
		And I'd worked on it for three weeks.
		And I walked into his office.
		And just a couple minutes later, he came back out and he said, Really good job.
		I said, thanks.
		And he handed me the draft back.
		And the first page was crossed out.
		And the second page was crossed out.
		And every page was crossed out.
		And he had flipped it over and written on the back, the cross motions for summary judgment are denied.
		That was the amount of work that was required for that motion.
		And I learned that you only put in the words that are required to achieve the outcome.
		I then got a chance to work for Justice Souter on the Supreme Court.
		And Justice Souter, who just passed away this year, was a very, very humble human being, even though he was very smart.
		And I saw that humility that he expressed.
		He was a Justice of the Supreme Court of the United States, and he expressed humility about the issues that he was confronting in relation to us, his very lowly clerks.
Addressing the Health Care Crisis 00:11:48
michael barr ▲ ● ▼		And I thought, well, if Justice Souter can be humble and use that to better understand the world around him, humility is not just a moral value.
		It is something that is good to know, to use in the world and to operate that way.
		I worked for Bob Rubin at the Treasury Department.
		I was his special assistant for a time when he was Treasury Secretary.
		And I saw the management style that he used in that organization, which was very flat.
unidentified		And we're going to leave this here for live coverage of a Capitol Hill news conference with House Minority Leader Hakeem Jeffries on the government shutdown day 10 here on C-SPAC.
hakeem jeffries ▲ ● ▼		Hardworking federal employees are working without pay.
		Donald Trump can find the time to play golf, but he can't be bothered negotiating a bipartisan agreement to reopen the government and address the health care crisis that they've created.
		And House Republicans remain on vacation for three weeks.
		The American people are sick and tired of the chaos, crisis, and confusion that has been visited upon the country by Donald Trump and Republican complete control of Congress.
		As Democrats, our position remains very clear.
		We will sit down with anyone, anytime, any place, here at the Capitol or back at the White House to reopen the government, pay our federal employees, enact a spending agreement that meets the needs of the American people, and at the same time, address the Republican health care crisis that is devastating the American people.
		Question?
unidentified		The president, you have said, should be involved with negotiations.
		He is headed out of the country.
		Do you have any sense of any negotiations happening or what sort of timeline will be worked on and any plea that you have for the president?
hakeem jeffries ▲ ● ▼		Donald Trump's strategy during this government shutdown that he has created has been to play golf and issue deep fake videos.
		Mike Johnson's strategy is to keep House Republicans on vacation.
		John Thune's strategy is to continue to do the same partisan thing over and over and over again and expect different results.
		That's legislative insanity.
		Our plea to our Republican colleagues is get serious about reopening the government.
		Let's have a conversation so we can find a bipartisan path forward to do the things that are necessary in a spending agreement to actually improve the quality of life of the American people and address the health care crisis that they've created, including by extending the Affordable Care Act tax credits.
		That's what we need to do right now so that tens of millions of Americans don't experience dramatically increased premiums, co-pays, and deductibles.
		That's going to bankrupt them or deprive them of the health care that they need.
unidentified		Mr. Jilliard, we're already seeing paychecks missed, soldiers lining up at food kitchens.
unidentified		Are you concerned that this fight for health care that Democrats are waging here might end up hurting Americans the longer the shutdown drags out?
hakeem jeffries ▲ ● ▼		Republicans have the House, the Senate, and the presidency.
		They decided to shut the government down.
		Republicans in the House have decided to remain on vacation.
		Republicans canceled votes last week.
		They canceled votes this week.
		And now they've canceled votes next week.
		They're not serious about reopening the government.
		Republicans aren't even serious about paying our active duty troops.
unidentified		But they have voted for temporary government funding legislation.
hakeem jeffries ▲ ● ▼		Republicans have voted for a Republicans have voted for a partisan spending bill that continues to gut the health care of the American people and threatens to raise the cost of living on tens of millions of Americans in an environment where Republicans promised to lower the cost of living on day one.
		Costs haven't gone down, they've gone up.
		Inflation has gone up.
		The Trump tariffs are making life more expensive by thousands of dollars a year for everyday Americans.
		They visited chaos and crisis and confusion on the American people from day one of the Trump presidency.
		And now they've decided that they'd rather shut the government down than fix our broken health care system.
unidentified		Good morning.
		When Democrats were in the majority in the Senate, there was sometimes a push to get rid of the legislative filibuster.
		Marjorie Taylor Greene and some Republicans have advocated for that.
		The speaker apparently spoke to Ms. Green about that very possibility.
		What if they were to get rid of the filibuster to pass that piece of legislation and Democrats would be kind of left at the table?
hakeem jeffries ▲ ● ▼		Marjorie Taylor Greene has made the observation that House Republican leadership and Senate Republican leadership are to blame for shutting the government down.
unidentified		Mr. Hill.
		Thank you, Mr. Leader.
		Speaker's also visibly upset during this press office this morning with banging the elector and blaming you and showing them up for troops not getting paid, some of the outcomes that some of my colleagues have mentioned already.
		Does that anger, does the emotion, the potentials that seem to be bubbling up, does it make it harder for you to negotiate or bring these Republicans to the table to have a conversation to move this thing forward, or should cooler hands prevail?
		Just how are you thinking about the emotion that seems to be taking over the Hill over the last week?
hakeem jeffries ▲ ● ▼		We should keep the focus on the health, the safety, and the well-being of the American people, of hardworking American taxpayers, of working class Americans, middle-class Americans, and everyday Americans.
		That's why we're fighting to lower the high cost of living.
		That's why Democrats are fighting to address the health care crisis that Republicans have created.
		That's the pain that Republicans have visited on everyday Americans.
		The largest cut to Medicaid in American history.
		Hospitals, nursing homes, and community-based health clinics all across America are closing because of what Republicans did in their one big ugly bill, where they rewarded their billionaire donors with massive permanent tax breaks.
		And now Republicans can't be bothered to even temporarily extend Affordable Care Act tax credits in order to make health care affordable for tens of millions of people who otherwise are going to face premiums that double, triple, or quadruple here in this country.
		That can't happen.
		This is the wealthiest country in the history of the world.
		And so I don't get why my colleagues on the other side of the aisle are getting emotional about their failed approach, their my way or the highway approach to governing, as if we're supposed to just bend the knee to extreme Republican demands, join them in passing a partisan Republican spending bill that guts the health care of the American people.
		It's not going to happen.
		Senate Democrats have repeatedly held the line.
		House Democrats remain unified.
		We were here last week.
		We're here this week.
		We will continue to be here to make clear to the American people, to our hardworking federal employees, to our men and women in uniform, and to the country that we want to find a bipartisan path forward, that we want to reopen the government.
		We need to reopen it now.
		And we need to address the Republican health care crisis that's devastating people across the country in rural America, in working class America, in urban America, in small town America, in the heartland of America, and in black and brown communities all across America.
unidentified		If Republicans were to commit to putting forward a vote setting a specific date on voting on these ACA subsidies extensions, is that enough to get Democrats to reopen the government and come to the table on that?
hakeem jeffries ▲ ● ▼		Republicans have zero credibility, zero on the issue of health care.
		For the last 15 years, they've done everything they can to try to repeal and displace the Affordable Care Act and tens of millions of Americans off of it, depriving them of the health care that they need so that people all across this country, including in rural America, can see a doctor or visit a hospital.
		That's what this fight is all about.
		So what we've said to our Republican colleagues is we have to address the health care crisis that they've created decisively.
		That means legislatively.
		And that means right now.
		Thanks.
michael barr ▲ ● ▼		Question on Obamacare.
unidentified		Steve Scalise was just saying Obamacare is a failed sinkhole needs to be replaced with something like HSA accounts.
unidentified		Can you react to that attitude coming from the Republicans on this side that Obamacare is not solving?
hakeem jeffries ▲ ● ▼		More than 70% of the American people want to see the Affordable Care Act maintained and the tax credits extended.
		And actually, our fight is for people in states like Louisiana.
		Because of what Republicans have done, hospitals and nursing homes and community-based health centers in Louisiana are closing.
		Healthcare is being ripped away from people in Louisiana because of what Republicans have done with their extreme one big ugly bill.
		Largest cut to Medicaid in American history.
		That's what Steve Scalise has done.
		That's what Mike Johnson has done.
		Throwing millions of Americans off of their health care, stealing food from the mouths of hungry children, veterans and seniors in their home state.
		And all of this was done by Republicans to reward their billionaire donors with massive tax breaks.
		That's unacceptable.
		We can have that debate on the House floor.
		Unfortunately, Republicans remain on vacation.
unidentified		Senator Jeffries, can you talk to us about the insurance companies?
		Are any of them responsible for the situation we're in right now?
		Is there a bipartisan interest to have more oversight of those insurance and health care company executives?
hakeem jeffries ▲ ● ▼		It's a bipartisan interest, I hope, in extending the Affordable Care Act tax credits, in addressing the massive Medicaid cuts that Republicans have inflicted on the American people.
hakeem jeffries ▲ ● ▼		And I hope that there's bipartisan interest in trying to reopen the hospitals, the nursing homes, and the community-based health centers that are closing because of Republicans and their failed policies this year.
mike johnson ▲ ● ▼		Republicans have canceled House votes for next Tuesday.
unidentified		Are you planning on bringing your full caucus back next week?
hakeem jeffries ▲ ● ▼		We have a caucus meeting at 12 p.m.
hakeem jeffries ▲ ● ▼		We'll have something to announce shortly thereafter.
unidentified		On Tuesday.
hakeem jeffries ▲ ● ▼		Kevin?
hakeem jeffries ▲ ● ▼		We have a caucus meeting at 12 noon today.
kevin frey ▲ ● ▼		At what point do you think it is too late to actually address these subsidies before that November 1st deadline, especially when, and we'll put this in context, we have not seen really any movement from Republicans suggesting we're going to do anything until you agree to open the government.
kevin frey ▲ ● ▼		So at what point do you have to acquiesce in order to protect the people and actually try to get something done?
hakeem jeffries ▲ ● ▼		We have seen rhetorical movement from Republicans, but actions speak louder than words.

Chapters

00:00:00 Eight Shutdown Votes
00:15:03 Tom Emmer's Dilemma
00:24:57 Tonight's Ceasefire Premier
00:28:59 Pce Inflation And Labor Supply Risks
00:44:09 AI's Impact on Economic Balances
00:59:48 Adding Morning Auctions to Repo Facility
01:00:33 Please Introduce Yourself
01:03:05 Unexpected Consumer Spending Surge
01:13:00 First Draft Crossed Out
01:15:01 Addressing the Health Care Crisis