Government Shutdown Threatens Food Stamps for Millions of Americans

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Kate Bullivant (0:12)

Tech giants are spending big on AI, but is it enough? Plus, what the looming end of food stamps would mean for millions of Americans. And we look into what's driving the rise of legally sanctioned homicides in many states.

Mark Maremont (0:27)

In the stand your ground states, there was a 59% increase in justifiable homicides over the six years versus a 16% increase in overall homicides. So there were some very interesting findings in the FBI data that nobody has ever really looked at before.

Kate Bullivant (0:43)

It's Friday, October 31st. I'm Kate Bullivant for The Wall Street Journal. And here is the AM Edition of What's News, the top headlines and business stories moving your world today. President Trump has urged Senate Republicans to get rid of the filibuster to reopen the government, the long-standing rule that requires 60 votes to advance most legislation. Posting on social media, Trump said it was time for Republicans to go for the quote nuclear option of eliminating the filibuster. Government funding lapsed on October 1st after a stopgap spending bill passed by the Republican-led House fell five votes short of the 60 needed in the Senate. Since then, Democrats have blocked the bill more than a dozen times, saying they won't provide the votes to reopen until Republicans negotiate a deal to extend enhanced Affordable Care Act health insurance subsidies. The mounting pressure to end the shutdown comes as a series of funding cliffs are starting to pinch more Americans, with one looming deadline concerning SNAP benefits which are due to end on Saturday. SNAP, once known as food stamps, is a federal program that provides assistance to people who can't afford to buy their own, helping around 42 million poor and disabled Americans to buy food each month. Journal reporter Sabrina Siddiqui explains what the cutoff to these vital benefits would look like.

Sabrina Siddiqui (2:15)

What we've been hearing when we've talked to SNAP beneficiaries or recipients this week is they already have received notifications from state authorities that funding will be paused for November because of the shutdown. A lot of them are going to end up showing up at food banks and food pantries across the country who have also said that they anticipate a sharp increase in people that they're going to need to feed. And they're really going to have to turn people away because they're just not going to have enough supply.

There are some states that are looking at moving their own budgets around. And if they have any room in their budget to try and have those benefits continue, more than a dozen states have actually filed a lawsuit against the Trump administration, saying that they cannot actually freeze the SNAP benefits as part of the shutdown because they could use federal government emergency funds to fund SNAP for the time being. States may be able to step in in some cases, but that's just not going to be the case everywhere.

Kate Bullivant (3:19)

Sabrina says that Democrats and Republicans are considering ways that could ensure the continuation of SNAP benefits, even with the government shutdown in place.

Sabrina Siddiqui (3:29)

This cliff where these SNAP benefits are going to run out has put a lot more pressure on both Democrats and Republicans to come to some kind of compromise, even if it means just a stand-alone bill to insure that people are able to use their food assistance benefits. And especially because this is coinciding with the holiday season. So the fact that the benefits won't be paid out in November when families are going to be gathering for Thanksgiving, and then you have Christmas holidays coming soon after that, there's so much more anger and frustration that they can't come to some kind of resolution in Washington and people are going to go hungry at such a crucial time.

Kate Bullivant (4:18)

It's been a busy week for tech earnings with Meta, Alphabet, Microsoft, Amazon and Apple all reporting positive quarterly results. And as you might expect, the focus of many earnings calls has been the spending on artificial intelligence. Silicon Valley's biggest companies are planning to pour $400 billion into AI efforts this year. And still, they say it's nowhere near enough. The Journal's Quentin Webb joins me now. Quentin, with this commitment to increase spending on AI and the recent earnings results, how are investors feeling?

Quentin Webb (4:56)

Investors on the whole are on board with this. If you look at the fact that stock markets have risen to record highs and the proportion of market value that has gone to the magnificent seven is higher than ever before. People are broadly supportive of the idea that AI is going to be a game changer. You need to spend heavily to ensure you're in the vanguard. But the question is, are you doing that at the expense of earnings? Are you doing that beyond your own financial capacity? We have seen a bit of a disparity this week where broadly the results from Big Tech have been welcomed with the notable exception of Meta where their pledges to keep aggressively spending on AI were actually met with a kind of more than 10% drop in the stock. And to a lesser extent with Microsoft where there was a bit of a sell off after the results. But overall, I would say that it's been a very positive earning season so far, a larger than usual proportion of stocks or companies have beaten forecast earnings.