--:-- Caitlin McCabe: It's Tuesday, September 30th. I'm Caitlin McCabe for The Wall Street Journal, and here's the AM edition of What's News, the top headlines and business stories moving your world today.
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--:-- Caitlin McCabe: The federal government is careening toward a shutdown after congressional leaders from both parties met with President Trump to try to hash out a deal—but emerged with no breakthrough. Yesterday, congressional leaders from both parties met with President Trump to try to hash out a deal, but emerged with no breakthrough. Barring some sort of miraculous agreement in the Senate, the government will likely shut down on Tuesday night. Funding for the government expires at midnight.
--:-- Natalie Andrews: I'm Wall Street Journal political correspondent Natalie Andrews. Republicans are holding firm on their seven-week stopgap bill to keep the government funded, while Democrats say they won't give their support unless billions of dollars in health care spending is restored.
--:-- Caitlin McCabe: Democrats are saying, no good, you didn't negotiate with us, we have some leverage and we want to use it. And so they're kind of at this just total gridlock. While Republicans have a 53 to 47 majority in the Senate, they don't have the 60 votes needed to pass a spending bill. Without a deal, the government will shut down at 12.01 a.m. Eastern on Wednesday, furloughing hundreds of thousands of federal workers and halting key operations.
--:-- Natalie Andrews: For Wall Street, that means the all-important jobs report likely won't be released on Friday. In holding firm, Democrats are making an important political calculation. They say if health insurance subsidies aren't extended, millions of Affordable Care Act users will see their bills soar, often by hundreds of dollars or more a year.
--:-- Caitlin McCabe: But as Natalie explains, a shutdown could inflict other pain on Americans. The Office of Management and Budget has signaled that in addition to putting federal employees on leave, they will be looking at ways to essentially fire federal employees. And those cuts will be permanent which has never happened in the past decade or so as we covered government shutdowns.
--:-- Natalie Andrews: So even though you have a lot of federal workers on furlough they generally gotten back pay and things like national parks have stayed open so that if people have vacations planned or things like that, they aren't just totally ruined and caught off guard.
--:-- Caitlin McCabe: For Wall Street, this means traders will be watching just how this political wrangling unfolds and what its impact on the U.S. economy might be. Yesterday, gold hit a new record high as investors waged the risks of a potential shutdown.
--:-- Natalie Andrews: The Trump administration is escalating its fight with Harvard University by starting a process called debarment that could make the university ineligible for federal grants over allegations of anti-Semitism on campus.
--:-- Caitlin McCabe: Earlier this month, a federal judge ruled that the government had to restore $2.2 billion in research funding to Harvard that the government had frozen earlier this year. This path to possible debarring would essentially declare the university unfit to do business with the government, which is another way the White House can seek to cut off funds.
--:-- Natalie Andrews: An administration official said the White House doesn't believe Harvard has sufficiently addressed anti-Semitism on campus. A Harvard spokesman did not have an immediate comment.
--:-- Caitlin McCabe: We've learned that YouTube has agreed to pay $24.5 million to settle a lawsuit brought by President Trump over the suspension of his account after the Capitol riot in 2021. White House reporter Annie Linske says this is the last of three similar settlements from YouTube, Meta and X, bringing the total from these cases to over $80 million.
--:-- Annie Linske: Legal experts we talked to have said there's more of a business reason for these companies to be settling with the president because it allows them to kind of put behind them this litigation and show sort of a sense of goodwill, a very generous amount of goodwill towards the president, who has been quite eager and quite willing to exact retribution on companies or entities that he finds to be in his crosshairs.
--:-- Caitlin McCabe: According to court papers, most of the YouTube settlement has been earmarked for the construction of a Mar-a-Lago style ballroom that Trump is building at the White House.
--:-- Ben Katz: And the journal is exclusively reporting that Boeing is planning a new narrow-body airplane that would succeed the 737 MAX. The plan is very much still coming together from Boeing's side. But what we've managed to pick out are kind of a few different pieces of evidence really showing what this new plane could really look like.
--:-- Caitlin McCabe: So we're talking brand new engines that could be 10 to 20 percent more fuel efficient. We're looking at ultra-thin wings. We're talking about a redesigned flight deck and control system.
--:-- Ben Katz: That's Journal Aviation reporter Ben Katz. He told us that the development of a new single-aisle plane marks a long-term bid by Boeing to recover business loss to rival Airbus during its series of safety and quality problems.
--:-- Caitlin McCabe: The plane Boeing is working on is a replacement for the 737 MAX The 737 MAX is the workhorse of the global aviation industry It competes in the segment with Airbus on the A320 The two of them dominate aircraft sales They dominate percentage of flights.
--:-- Ben Katz: What this really represents for Boeing is them throwing the gauntlet down at Airbus' feet. They're saying, you know, we're not giving up. You guys have taken a lot of market share off us, but aerospace industry is a long-term game. And if we start working on something now, we could have something to release in the next decade or so that could start clawing back the market share that Boeing has lost to Airbus over its series of crises.
--:-- Caitlin McCabe: So this really is potentially a pivotal moment in Boeing's history, essentially, where they faced this loss of market share, they've lost their crown to Airbus, and now they're looking at how they can fight back.
--:-- Ben Katz: Boeing's chief executive officer, Kelly Ortberg, hasn't publicly detailed any plans for a successor to the 737, saying that he continues to prioritize fixing the company's long-running quality problems and shoring up its balance sheet.
--:-- Caitlin McCabe: Coming up, hundreds of military leaders are gathering with President Trump in Virginia today for a highly unusual meeting called by Defense Secretary Pete Hegseth. But what exactly are they doing there? We unpack that question after the break.
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--:-- Caitlin McCabe: The president and roughly 800 of America's top military commanders are converging on a marine base in Quantico, Virginia today for a highly unusual meeting convened by Defense Secretary Pete Hegseth. The gathering is the culmination of frustrations by Hegseth that his, quote, warrior ethos agenda isn't being implemented quickly enough and comes as his management of the department has faced scrutiny from lawmakers.
--:-- Shelby Holiday: I'm Wall Street Journal reporter Shelby Holiday. I've been following the lead up to the meeting. Shelby, I think when news of this meeting came out last week, it raised a bunch of alarm bells. It's not every day we see meetings like this, but it turns out it's all about something perhaps a bit more mild called warrior ethos.
--:-- Caitlin McCabe: What is that?
--:-- Shelby Holiday: It really remains to be seen. But you're right. When this invitation came out, there was no reason given for the meeting. So it set off all kinds of speculation among senior officials about what this meeting was about.
--:-- Caitlin McCabe: So at first, there was a lot of concern that it could involve some sort of mass firing of the top brass. But after President Trump commented on the meeting and said it was more about talking about how great everyone's doing and it sort of seemed like it was a morale boosting meeting, that concern has died down a bit.
--:-- Shelby Holiday: Some of the senior officials I've been talking to think maybe they'll hear a bit more about the new national defense strategy that lays out the administration's priorities. That is due any day, and so it would make sense that that could be talked about.
--:-- Caitlin McCabe: But we are also you know reporting that Secretary Hegseth plans to give this speech about the warrior ethos and it unclear what that will entail Some inside and outside the administration think maybe this meeting is just about Secretary Hegseth getting ahead of some embarrassing news which is an inspector general report on his handling of classified information.
--:-- Shelby Holiday: If you remember those signal chats back in the spring, that's expected soon, too. Yeah, those signal chats made a bunch of headlines earlier this year, but that's only one piece of criticism that Hegseth has faced since stepping into this role, right?
--:-- Caitlin McCabe: Yeah. So back in the spring when the U.S. was launching Operation Rough Rider, which was a campaign against the Houthis in Yemen, Secretary Hegseth put details that many believed were classified into a signal chat.
--:-- Shelby Holiday: And that signal chat included people who did not have security clearances. So there's been a lot of concern that he was sharing classified information illegally. And that is the subject of an IG report currently. And that has led to a lot of criticism of his management style because he has turned around and really cracked down on leakers in the Pentagon.
--:-- Caitlin McCabe: There have been lots of discussions about lie detector tests. People have been fired for leaking. Yet he, the secretary of the entire department, has been putting information in signal chats that many believe was totally inappropriate.
--:-- Shelby Holiday: So that's been a big problem. And others in the building also think he might feel a bit overshadowed by some of his secretaries and top generals and military officials. For example, when the U.S. carried out that pretty incredible attack against Iran, it was the chairman of the Joint Chiefs that was said to be heavily involved in that and not Secretary Hegseth.
--:-- Caitlin McCabe: Shelby, I also have to ask about the logistical coordination for a meeting like this. I mean, 800 of the top military brass coming to Quantico. How much of a scramble is this?
--:-- Shelby Holiday: It is a huge effort to get everyone here. We know that they've been told to wear their dress uniforms, but some who have been traveling and haven't been able to go back and get their dress uniforms may have to show up in something else.
--:-- Caitlin McCabe: And I've been asking officials how they're getting to this location. And that is an operational security issue. Nobody wants to talk about how they're flying or traveling.
--:-- Shelby Holiday: However, we know it's going to cost millions of dollars. We're talking hundreds of officials from all over the world coming to one location with the president of the United States. I'm sure that security alone is going to be a super steep bill.
--:-- Caitlin McCabe: So the logistics are definitely interesting here. Super fascinating. That's Wall Street Journal reporter Shelby Holiday. Shelby, thanks for being here.
--:-- Shelby Holiday: Thanks for having me.
--:-- Caitlin McCabe: And that's it for What's News for this Tuesday morning. Today's show is produced by Kate Boulivant and Roma McKenna. Our supervising producer is Sandra Kilhoff. And I'm Caitlin McCabe for The Wall Street Journal. We'll be back tonight with a new show. Until then, thanks for listening.
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