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Vance says 1.3 million U.S. troops will be paid at the end of the week as pressure mounts for Democrats to end the shutdown

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Vice President JD Vance said Tuesday he believes U.S. military members will be paid at the end of the week, though he did not specify how the Trump administration will reconfigure funding as pain from the second-longest shutdown spreads nationwide.

The funding fight in Washington gained new urgency this week as millions of Americans face the prospect of losing food assistance, more federal workers miss their first full paycheck and recurring delays at airports snarl travel plans.

“We do think that we can continue paying the troops, at least for now,” Vance told reporters after lunch with Senate Republicans at the Capitol. “We’ve got food stamp benefits that are set to run out in a week. We’re trying to keep as much open as possible. We just need the Democrats to actually help us out.”

The vice president reaffirmed Republicans’ strategy of trying to pick off a handful of Senate Democrats to vote for stopgap funding to reopen the government. But nearly a month into the shutdown, it hasn’t worked. Just before Vance’s visit, a Senate vote on legislation to reopen the government failed for the 13th time.

Federal employee union calls for end to shutdown

The strain is building on Democratic lawmakers to end the impasse. That was magnified by the nation’s largest federal employee union, which on Monday called on Congress to immediately pass a funding bill and ensure workers receive full pay. Everett Kelley, president of the American Federation of Government Employees, said the two political parties have made their point.

“It’s time to pass a clean continuing resolution and end this shutdown today. No half measures, and no gamesmanship,” said Kelley, whose union carries considerable political weight with Democratic lawmakers.

Still, Democratic senators, including those representing states with many federal workers, did not appear ready to back down. Virginia Sen. Tim Kaine said he was insisting on commitments from the White House to prevent the administration from mass firing more workers. Democrats also want Congress to extend subsidies for health plans under the Affordable Care Act.

“We’ve got to get a deal with Donald Trump,” Kaine said.

But shutdowns grow more painful the longer they go. Soon, with closures lasting a fourth full week as of Tuesday, millions of Americans are likely to experience the difficulties firsthand.

“This week, more than any other week, the consequences become impossible to ignore,” said Rep. Lisa McClain, chair of the House Republican Conference.

How will Trump administration reconfigure funds?

The nation’s 1.3 million active duty service members were at risk of missing a paycheck on Friday. Earlier this month, the Trump administration ensured they were paid by shifting $8 billion from military research and development funds to make payroll. Vance did not say Tuesday how the Department of Defense will cover troop pay this time.

Larger still, the Trump administration says funding will run out Friday for the food assistance program that is relied upon by 42 million Americans to supplement their grocery bills. The administration has rejected the use of more than $5 billion in contingency funds to keep benefits flowing into November. And it says states won’t be reimbursed if they temporarily cover the cost of benefits next month.

A coalition of 25 states and the District of Columbia filed a lawsuit Tuesday in Massachusetts that aims to keep SNAP benefits flowing by compelling the Agriculture Department to use the SNAP contingency funds.

Vance said that reconfiguring funds for various programs such as SNAP was like “trying to fit a square peg into a round hole with the budget.”

The Agriculture Department says the contingency fund is intended to help respond to emergencies such as natural disasters. Democrats say the decision concerning the Supplemental Nutrition Assistance Program, known as SNAP, goes against the department’s previous guidance concerning its operations during a shutdown.

Senate Democratic leader Chuck Schumer of New York said the administration made an intentional choice not to the fund SNAP in November, calling it an “act of cruelty.”

Another program endangered by the shutdown is Head Start, with more than 130 preschool programs not getting federal grants on Saturday if the shutdown continues, according to the National Head Start Association. All told, more than 65,000 seats at Head Start programs across the country could be affected.

Judge blocks firings

A federal judge in San Francisco on Tuesday indefinitely barred the Trump administration from firing federal employees during the government shutdown, saying that labor unions were likely to prevail on their claims that the cuts were arbitrary and politically motivated.

U.S. District Judge Susan Illston granted a preliminary injunction that bars the firings while a lawsuit challenging them plays out. She had previously issued a temporary restraining order against the job cuts that was set to expire Wednesday.

Federal agencies are enjoined from issuing layoff notices or acting on notices issued since the government shut down Oct. 1. Illston said that her order does not apply to notices sent before the shutdown.

Will lawmakers find a solution?

At the Capitol, congressional leaders mostly highlighted the challenges many Americans are facing as a result of the shutdown. But there was no movement toward negotiations as they attempted to lay blame on the other side of the political aisle.

“Now government workers and every other American affected by this shutdown have become nothing more than pawns in the Democrats’ political games,” said Senate Majority Leader John Thune, R-S.D.

The House passed a short-term continuing resolution on Sept. 19 to keep federal agencies funded. Speaker Mike Johnson, R-La., has kept the House out of legislative session ever since, saying the solution is for Democrats to simply accept that bill.

But the Senate has consistently fallen short of the 60 votes needed to advance that spending measure. Democrats insist that any bill to fund the government also address health care costs, namely the soaring health insurance premiums that millions of Americans will face next year under plans offered through the Affordable Care Act marketplace.

Window-shopping for health plans delayed

When asked about his strategy for ending the shutdown, Schumer said that millions of Americans will begin seeing on Saturday how much their health insurance is going up next year.

“People in more than 30 states are going to be aghast, aghast when they see their bills,” Schumer said. “And they are going to cry out, and I believe there will be increased pressure on Republicans to negotiate.”

The window for enrolling in ACA health plans begins Saturday. In past years, the Centers for Medicare and Medicaid Services has allowed Americans to preview their health coverage options about a week before open enrollment. But, as of Tuesday, Healthcare.gov appeared to show 2025 health insurance plans and estimated prices, instead of next year’s options.

Republicans insist they will not entertain negotiations on health care until the government reopens.

“I’m particularly worried about premiums going up for working families,” said Sen. David McCormick, R-Pa. “So we’re going to have that conversation, but we’re not going to have it until the government opens.”

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Associated Press writers Lisa Mascaro and Joey Cappelletti in Washington and Marc Levy in Harrisburg, Pennsylvania, contributed to this report.



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On Netflix’s earnings call, co-CEOs can’t quell fears about the Warner Bros. bid

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When it comes to creating irresistible storylines, Netflix, the home of Stranger Things and The Crown, is second to none. And as the streaming video giant delivered its quarterly earnings report on Tuesday, executives were in top storytelling form, pitching what they promise will be a smash hit: the acquisition of Warner Brothers Discovery.

The company’s co-CEOs, Ted Sarandos and Greg Peters, said the deal, which values Warner Brothers Discovery at $83 billion, will accelerate its own core streaming business while helping it expand into TV and the theatrical film business. 

“This is an exciting time in the business. Lots of innovation, lots of competition,” Sarandos enthused on Tuesday’s earnings conference call. Netflix has a history of successful transformation and of pivoting opportunistically, he reminded the audience: Once upon a time, its main business entailed mailing DVDs in red envelopes to customers’ homes. 

Despite Sarandos’ confident delivery, however, the pitch didn’t land with investors. The company’s stock, which was already down 15% since Netflix announced the deal in early December, sank another 4.9% in after-hours trading on Tuesday. 

Netflix’s financial results for the final quarter of 2025 were fine. The company beat EPS expectations by a penny, and said it now has 325 million paid subscribers and a worldwide total audience nearing 1 billion. Its 2026 revenue outlook, of between $50.7 billion and $51.7 billion, was right on target.  

Still, investors are worried that the Warner Bros. deal will force Netflix to compete outside its lane, causing management to lose focus. The fact that Netflix will temporarily halt its share buybacks in order to accumulate cash to help finance the deal, as it disclosed towards the bottom of Tuesday’s shareholder letter, probably didn’t help matters. 

And given that there’s a rival offer for Warner Bros from Paramount Skydance, it’s not unreasonable for investors to worry that Netflix may be forced into an expensive bidding war. (Even though Warner Brothers Discovery has accepted the Netflix offer over Paramount’s, no one believes the story is over—not even Netflix, which updated its $27.75 per share offer to all-cash, instead of stock and cash, hours earlier on Tuesday in order to provide WBD shareholders with “greater value certainty.”) 

Investors are wary; will regulators balk?

Warner Brothers investors are not the only audience that Netflix needs to win over. The deal must be blessed by antitrust regulators—a prospect whose outcome is harder to predict than ever in the Trump administration.

Sarandos and Peters laid out the case Tuesday for why they believe the deal will get through the regulatory process, framing the deal as a boon for American jobs.

“This is going to allow us to significantly expand our production capacity in the U.S. and to keep investing in original content in the long term, which means more opportunities for creative talent and more jobs,” Sarandos said.

Referring to Warner Brothers’ television and film businesses, he added that “these folks have extensive experience and expertise. We want them to stay on and run those businesses. We’re expanding content creation not collapsing it.”

It’s a compelling story. But the co-CEOs may have neglected to study the most important script of all when it comes to getting government approval in the current administration; they forgot to recite the Trump lines. 

The example has been set over the past 12 months by peers such as Nvidia’s Jensen Huang and Meta’s Mark Zuckerberg. The latter, with his company facing various federal regulatory threats, began publicly praising the Trump administration on an earnings call last January. 

And Nvidia’s Huang has already seen real dividends from a similar strategy. The chip company CEO has praised Trump repeatedly on earnings calls, in media interviews, and in conference keynote speeches, calling him “America’s unique advantage” in AI. Since then, the U.S. ban on selling Nvidia’s H200 AI chips to China has been rescinded. The praise may have been coincidental to the outcome, but it certainly didn’t hurt.

In contrast, the president went unmentioned on Tuesday’s call. How significant Netflix’s omission of a Trump call-out turns out to be remains to be seen; maybe it won’t matter at all. But it’s worth noting that its competitor for Warner Bros., Paramount Skydance, is helmed by David Ellison, an outspoken Trump supporter. 

It’s a storyline that Netflix should have seen coming, and itmay still send the company back to rewrite.



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Americans are paying nearly all of the tariff burden as international exports die down, study finds

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After nearly a year of promises tariffs would boost the U.S. economy while other countries footed the bill, a new study shows almost all of the tariff burden is falling on American consumers. 

Americans are paying 96% of the costs of tariffs as prices for goods rise, according to research published Monday by the Kiel Institute for the World Economy, a German think tank. 

In April 2025 when President Donald Trump announced his “Liberation Day” tariffs, he claimed: “For decades, our country has been looted, pillaged, raped, and plundered by nations near and far, both friend and foe alike.” But the report suggests tariffs have actually cost Americans more money.

Trump has long used tariffs as leverage in non-trade political disputes. Over the weekend, Trump renewed his trade war in Europe after Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland sent troops for training exercises in Greenland. The countries will be hit with a 10% tariff starting on Feb. 1 that is set to rise to 25% on June 1, if a deal for the U.S. to buy Greenland is not reached. 

On Monday, Trump threatened a 200% tariff on French wine, after French President Emmanuel Macron refused to join Trump’s “Board of Peace” for Gaza, which has a $1 billion buy-in for permanent membership. 

“The claim that foreign countries pay these tariffs is a myth,” wrote Julian Hinz, research director at the Kiel Institute and an author of the study. “The data show the opposite: Americans are footing the bill.” 

The research shows export prices stayed the same, but the volume has collapsed. After imposing a 50% tariff on India in August, exports to the U.S. dropped 18% to 24%, compared to the European Union, Canada, and Australia. Exporters are redirecting sales to other markets, so they don’t need to cut sales or prices, according to the study.

“There is no such thing as foreigners transferring wealth to the U.S. in the form of tariffs,” Hinz told The Wall Street Journal

For the study, Hinz and his team analyzed more than 25 million shipment records between January 2024 through November 2025 that were worth nearly $4 trillion.They found exporters absorbed just 4% of the tariff burden and American importers are largely passing on the costs to consumers. 

Tariffs have increased customs revenue by $200 billion, but nearly all of that comes from American consumers. The study’s authors likened this to a consumption tax as wealth transfers from consumers and businesses to the U.S. Treasury.   

Trump has also repeatedly claimed tariffs would boost American manufacturing, butthe economy has shown declines in manufacturing jobs every month since April 2025, losing 60,000 manufacturing jobs between Liberation Day and November. 

The Supreme Court was expected to rule as soon as today on whether Trump’s use of emergency powers to levy tariffs under the International Emergency Economic Powers Act was legal. The court initially announced they planned to rule last week and gave no explanation for the delay. 

Although justices appeared skeptical of the administration’s authority during oral arguments in November, economists predict the Trump administration will find alternative ways to keep the tariffs.



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Selling America is a ‘dangerous bet,’ UBS CEO warns as markets panic

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Investors are “selling America” in spades Tuesday: The 10-year Treasury yield is at its highest point since August; the U.S. dollar slid; and the traditional safe-haven metal investments—gold and silver—surged once again to record highs.

The CEO of UBS Group, the world’s largest private bank, thinks this market is making a “dangerous bet.”

“Diversifying away from America is impossible,” UBS Group CEO Sergio Ermotti told Bloomberg in a television interview at the World Economic Forum in Davos, Switzerland, on Tuesday. “Things can change rapidly, and the U.S. is the strongest economy in the world, the one who has the highest level of innovation right now.” 

The catalyst for the selloff was fresh escalation from U.S. President Donald Trump, who has threatened a 10% tariff on eight European allies—including Germany, France, and the U.K.—unless they cede to his demands to acquire Greenland.

Trump also threatened a 200% tariff on French wine and Champagne to pressure French President Emmanuel Macron to join his Board of Peace. Trump’s favorite “Mr. Tariff” is back, and bond investors are unhappy with the volatility.

But if investors keep getting caught up in the volatility of day-to-day politics and shun the U.S., they’ll miss the forest for the trees, Ermotti argued. While admitting the current environment is “bumpy,” he pointed to a statistic: Last year alone, the U.S. created 25 million new millionaires. For a wealth manager like UBS, that is 1,000 new millionaires a day. To shun that level of innovation in U.S. equities for gold would be a reactionary move that ignores the long-term innovation of the U.S. economy. 

“We see two big levers: First of all, wealth creation, GDP growth, innovation, and also more idiosyncratic to UBS is that we see potential for us to become more present, increase our market share,” Ermotti said. 

But if something doesn’t give in the standoff between the European Union and Trump, there could be potential further de-dollarization, this time, from Europe selling its U.S. bonds, George Saravelos, head of FX research at Deutsche Bank, wrote in a note Sunday. Indeed, on Tuesday, Danish pension funds sold $100 million in U.S. Treasuries, allegedly owing to “poor” U.S. finances, though the pension fund’s chief said of the debacle over Greenland: “Of course, that didn’t make it more difficult to take the decision.” 

Europe owns twice as many U.S. bonds and equities as the rest of the world combined. If the rest of Europe follows Denmark’s lead, that could be an $8 trillion market at risk, Saravelos argued. 

“In an environment where the geo-economic stability of the Western alliance is being disrupted existentially, it is not clear why Europeans would be as willing to play this part,” he wrote. 

Back in the U.S., the markets also sold off as the Nasdaq and S&P both fell 2% Tuesday, already shedding the entirety of Greenland’s value on Trump’s threats, University of Michigan economist Justin Wolfers noted. Analysts and investors are uneasy, given the history of Trump declaring a stark tariff before negotiating with the country to take it down, also known as the “TACO”—Trump always chickens out—effect. Investors have been “burnt before by overreacting to tariff threats,” Jim Reid of Deutsche Bank noted. That’s a similar stance to the UBS bank chief: If you react too much to headlines, you’ll miss the great innovation that’s pushed the stock market to record highs for the past three years.

“I wouldn’t really bet against the U.S.,” he said.



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