Cozen Currents: No One is to Blame

“While both parties are currently locked in political jockeying to place the blame for a potentially imminent government shutdown on the other, history shows that voters tend to not factor in such funding lapses when the time comes in the polling booth.” — Howard Schweitzer, CEO, Cozen O’Connor Public Strategies

The Cozen Lens

• With congressional leadership deeply divided over how to avert a government shutdown at the end of month, both parties are gearing up to blame the other for the funding lapse. Despite the messaging wars, history suggests that the long-term political ramifications of the shutdown will be limited.
• The Trump administration’s plan to build a nuclear reactor on the surface of the moon is just the least of their efforts to spark an atomic renaissance.
• President Trump and Republicans in Washington, DC are looking to move fast and break things on AI while California lawmakers have passed legislation to regulate the emerging technology.

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Why a Shutdown Does and Doesn’t Matter

Trading Places. In a reversal of recent political history, its Democrats in Congress who are opposed to passing a temporary “clean” extension of government funding, instead utilizing the threat of a shutdown as leverage to extract other policy concessions from the GOP majority.

• Late last week, Senate Democrats voted nearly unanimously to block passage of a GOP-led continuing resolution that would fund the government through November 21st, following in the footsteps of their House Democratic counterparts. The decision to vote against the bill was part of a joint strategy devised by House Minority Leader Hakeem Jeffries (D-NY) and Senate Minority Leader Chuck Schumer (D-NY) to use the limited leverage the minority party has to take a stand against the White House and its expansion of executive authority. Democrats, and Schumer in particular, are under significant pressure from the party base to demonstrate resistance following a decision earlier this year to fund the government on the GOP’s terms.
• For Schumer and Democratic leadership, the decision to risk a shutdown and reject a so-called “clean” continuing resolution offered by the GOP is a role reversal from years prior. Since 2000, there have been three government shutdowns, the two longest of which were forced by GOP demands for unrelated policy changes: a repeal of the Affordable Care Act (ACA) in 2013 and funding for the border wall in late 2018. During both of those experiences, Democrats rejected the premise that government funding should be held hostage during negotiations over unrelated policy priorities.
• Despite their historical opposition to such tactics, Schumer and Senate Democrats argue that this time around is different. In an almost identical setup to the 2013 shutdown, Democrats are demanding healthcare-related concessions, saying any funding bill must also include an agreement to extend the expiring ACA enhanced premium credits. Democratic leadership believes that the healthcare focus will resonate with voters, leading the GOP to shoulder the blame for a shutdown, a strategy that’s been buoyed by recent polling.

Do Shutdowns Matter Politically? While both parties are working overtime to lay the blame on the other for a government shutdown, historical evidence suggests that voters won’t factor the funding lapse into their midterm votes.

• According to reporting from ABC, voters have historically soured on the party that forced the shutdown in the short term. In the wake of the 2013 government shutdown, Democrats’ lead on the congressional generic ballot temporarily increased by about four points as voters blamed the GOP for the lapse in funding. Again in 2018, Democrats’ favorability rating temporarily jumped while President Trump’s approval sank as voters blamed the administration for the shutdown.
• Despite the clear effect of a shutdown on voters’ attitudes in the immediate wake of the funding lapse, ABC also found that the long-term implications are limited. Due to the ever evolving news cycle, voters typically forget about the shutdown by the time the midterms come around. As an example, in 2013 the GOP ultimately overtook Democrats on the generic ballot, going on to expand the party’s congressional majority in 2014 despite being blamed for the 2013 shutdown by voters.

A Shutdown Won’t Determine the Power of the Purse. However the threat of, or a shutdown itself, is resolved, it won’t end the debate over the power of the purse that helped provoke the current standoff.

• The White House’s withholding of congressionally-appropriated funds is among the main reasons Democrats feel compelled to leverage government funding to take a stand against the administration. Through the use of so-called “pocket rescissions” as well as a broader behind the scenes effort, the administration is withholding more than $400 billion in congressionally-mandated funding according to Democrats. With the White House unwilling to spend all of the money Congress appropriates, congressional Democrats are worried that any funding agreement Congress reaches won’t be honored by the White House.
• While Democrats included limitations on the White House’s impoundment authority in their government funding counterproposal, GOP lawmakers aren’t willing to include any similar language in a negotiated deal, whether the government shuts down or not. Instead, the impoundment debate is likely to be settled by the courts, beginning with a case before the Supreme Court over the White House’s ability to utilize pocket rescissions.

Seeking Critical Mass for Nuclear Power

Fission’s Lucky Break. Both political and economic forces have aligned to elevate nuclear power like never before.

• “This year is by far the biggest year in terms of nuclear deals that has occurred, probably, since the 70s.” The culprit? Tech companies are desperate to power spiraling AI energy consumption. Data center investments are contributing about as much to US GDP growth in 2025 as consumer spending. Google, Kairos Power, and the Tennessee Valley Authority signed a power purchasing agreement last month. TVA is the first utility to secure an agreement for a Generation IV advanced reactor in the US. Earlier this month, Amazon, X-energy, and South Korean partners signed a memorandum of understanding that would add 64 new small reactors to the US over the next 14 years.
• Republicans are fully on board with a nuclear renaissance. Even as the GOP’s tax cut bill severely ratcheted back tax credits for renewables, those for atomic energy were left by and large alone (and even expanded). Democrats, meanwhile, have been steadily abandoning previous environmental objections to nuclear plants and instead highlighting the fact they are zero-carbon sources of electricity. Public support for building more reactors is near an all-time high for both parties and this support is now being reflected in federal policy.

Full Faith and Credit of the Federal Government. The Trump administration, empowered by Congress, is doing everything in its power to encourage nuclear development.

• The Department of Energy (DOE) has taken a leading role in spurring the next generation of nuclear technology. In just the last month or so, the agency has selected its first pilot project for establishing domestic nuclear fuel supply chains, distributed highly enriched uranium to three firms, signed two separate deals to build enrichment plants worth $1.5 billion each, and launched a consortium leveraging the Defense Production Act to jumpstart fuel production.
• The centerpiece of the push is the selection of 11 advanced reactor projects with the goal of getting three operating by July 2026. Critically, approval of these reactors would be handled solely through the DOE, sidestepping entirely the traditional and time-consuming licensing process at the Nuclear Regulatory Commission (NRC). A similar run-around is also underway between the Department of Defense and X-energy. A representative from DOGE recently told the NRC’s chair and top staff that they would be expected to “rubber stamp” approvals to reactors already tested under DOE.
• Previously mothballed reactors are being brought back online. The NRC gave the greenlight to the Palisades plant in Michigan to restart in July — something that has never happened before in the US. The Federal Energy Regulatory Commission has approved a request for the same to occur in Iowa and Microsoft and Constellation plan to reopen a reactor at Three Mile Island. The industry obviously faces its own technological and economic obstacles but this is the strongest tailwinds it’s had at its back in decades and federal support is strong and even growing.

Trump is Looking to Move Fast and Break Things on AI

A Light Touch. The Trump administration has taken an industry-friendly approach to AI.

• In a recent interview with Axios, Michael Kratsios, director of the White House Office of Science and Technology Policy (OSTP), said that the OSTP would ask for public input on federal regulations that respondents believe hold back AI, as directed by President Trump’s AI Action Plan. This request for public comment could tee up a deregulatory push. Kratsios noted that the White House favored a “use-case and sector-specific” approach to AI rules, such as in the healthcare or finance domains, the opposite of the EU’s comprehensive AI regulation.
• Senator Ted Cruz (R-TX) recently introduced legislation to codify one of the components of Trump’s plan: regulatory sandboxes. Cruz’s bill would allow for waivers or modifications to federal rules for two-year periods, extendable for up to 10 years. The OSTP would oversee the program.
• Trump’s AI plan increases scrutiny of a patchwork of state restrictions on AI and calls on the Federal Communications Commission (FCC) to assess whether state AI rules interfere with the federal Communications Act of 1934. FCC Chairman Brendan Carr said at a recent Politico AI event that “we are seeking comment and going to be looking out for forms of AI regulation at the state level that could be inhibiting this type of infrastructure and then we have some authority to step in.” It’s not entirely clear what the FCC may do but the agency will likely be able to act more quickly than Congress on pre-emption of state AI rules.

California Cracks Down. Golden State lawmakers passed new bills to regulate AI during their recent legislative session.

• The state legislature passed state Senator Scott Wiener’s (D) bill to require large AI developers to share frontier model frameworks and disclose an assessment of catastrophic risks to a state agency. The latest version of the bill has been slimmed down significantly, a win for Silicon Valley. Other bills advanced by the legislature include measures relating to AI chatbots, identifying authentic versus AI-generated content, and the use of AI in employment.
• It remains to be seen whether Governor Gavin Newsom (D-CA) will sign any of the AI bills on his desk (he has until mid-October to decide whether to wield his veto pen). If lawmakers get their way, California would be in the vanguard of AI regulation. The Golden State could have a disproportionate impact due to the size of its market and serve as a model for other states to follow. Newsom has positioned himself as an ally of the tech sector. His decision comes in the shadow of the upcoming race for the 2028 Democratic presidential nomination.

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