By FATIMA HUSSEIN

WASHINGTON (AP) — Even for an agency accustomed to criticism, this summer’s debate over Republicans’ big bill of tax breaks and spending cuts was a harsh one for the Congressional Budget Office.

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“Notorious for getting it wrong,” was the judgment of Speaker Mike Johnson. “Making the same mistakes,” was the refrain from House Majority Leader Steve Scalise, R-La. President Donald Trump dismissed the CBO as “very hostile.”

For the CBO’s director, Phillip Swagel, the “incoming fire,” as he calls it, is simply part of the job.

“We’re just trying to get it right and inform the Congress and the country,” he said in an interview with The Associated Press. “There’s no agenda here.”

Tasked with producing nonpartisan analysis for Congress, it’s up to Swagel and expert staffers at the CBO to assess the impact of legislation on economic growth and the nation’s finances — producing “scores,” in the parlance of Washington, that often reverberate across the dominant political debates of the day. Both major political parties often dispute the agency’s findings, particularly when their top priorities are at stake.

“Sometimes it’s noise, sometimes it’s not. But we just tune it out. Here we do our work,” Swagel said. “The thing that I do care about a lot is to make sure our work is accurate.”

It’s a low-key approach Swagel has maintained at the CBO since 2019, when congressional leaders appointed him the director after stints in both Republican and Democratic administrations. An economist by trade, Swagel brings an inquisitive and genial approach to the job, his knowledge of government forged by work at the Council of Economic Advisers in the White House, the Treasury Department, the Federal Reserve and the International Monetary Fund.

“The challenge of doing analysis now,” Swagel said, “is the changes we’re seeing in our economy are really large.”

From the Trump administration’s mass deportation plans, to the unprecedented implementation of sweeping tariffs on countries around the world, to massive tax and spending cuts passed into law this summer, assessing the trajectory of the U.S. economy has grown more difficult.

Swagel recently sat down with the AP to talk at length about analyses from his agency, the future of the nation’s entitlement programs and the pressure to remain unbiased when data itself is at risk of being politicized.

How Trump’s tariffs are upending economic models

Trump’s sweeping tariffs plan has posed challenges to the CBO’s standard models for assessing trade.

The baseline tariffs on all countries and higher rates on Trump’s “worst offenders” list are different from what “we’ve seen in more than 100 years,” Swagel said. It’s a dramatic shift away from the low-tariff era that has existed since World War II. “We’re going to be looking carefully to see if those models still apply, or if tariffs that are this large, do those have effects that we just haven’t counted on?” he said.

So far, the CBO estimates the tariffs could reduce the national deficit by $4 trillion over the next decade, helping to offset the deficit increases it projects will result from the Republicans’ big bill passed this year. “It’s a huge impact,” Swagel said.

The CBO also anticipates Trump’s tariffs will cause roughly two years of elevated inflation, Swagel said, causing price increases for businesses and customers. But he says those effects will be temporary.

“As the tariffs go up and the prices go up with the tariffs, inflation will be higher, but then prices will get to a higher level and be stable,” he said. “And then the inflationary impact will subside.”

Immigration cuts different ways

Swagel said there are “pros and cons” when assessing how immigration affects the economy.

Phillip Swagel, director of the Congressional Budget Office, speaks during an interview with The Associated Press, Wednesday, Sept. 17, 2025, in Washington. (AP Photo/Alex Brandon)

“Immigrants have added to our labor force, and that has meant higher GDP. It’s meant more revenue and a lower deficit,” Swagel said. “But, of course, there’s lots of issues related to immigration,” notably that “more immigrants put more fiscal pressure on state and local governments — on schools, on police, on health care systems and other things.”

“So, for the federal government, immigration is a fiscal positive,” he said, “but for state and local governments, it’s the opposite.”

Trump’s tax and spending law signed in July will result in roughly 320,000 people being removed from the United States over the next 10 years, the CBO said in a recent report. It also projected the U.S. population will grow more slowly than previously expected.

That law includes roughly $150 billion to ramp up deportations over the next four years.

Swagel says it’s not his place to say how immigration laws should be crafted.

“Our role is just to say what the budget impact is,” he said. “It’s for the political system to figure out, ‘Well, what’s the right choices to make for the country?’”

The strain on Social Security and Medicare

Swagel said U.S. entitlement programs “are all part of a challenging fiscal trajectory” for the country. But the greatest obstacle to doing something about it, he said, is that “the decisions don’t need to be made right away.”

The go-broke dates for Medicare and Social Security are now 2033 and 2034, respectively. On those dates, Medicare’s Hospital Insurance Trust Fund and Social Security’s trust funds. which cover old age and disability recipients, will no longer be able to pay out full benefits, according to the latest report from the programs’ trustees.

While fast approaching, the insolvency dates are a lifetime away for lawmakers always inclined to kick the can down the road on big fiscal decisions.

“We have a stable economy, an economy that’s growing,” Swagel said. “We’ve seen a slowing economy in the second half of 2025, but the economy is still growing and still creating jobs. And so there’s not a crisis.”

“Difficult decisions need to be made,” he said.

Criticism of the CBO’s data

The CBO has faced more aggressive attacks on its analyses during Trump’s second term, often amplified by his fellow Republicans in Congress. Earlier this year, Trump called the CBO a “very hostile” organization.

Swagel downplayed the tension, saying that “our working relationship with the executive branch is smooth and routine, that when we evaluate legislation, every piece of legislation results in a phone call to some executive branch agency.”

“There is this incoming fire on the CBO,” which Swagel says is part of the political process. “I understand that sometimes that kind of criticism might be helpful in the eyes of the people making it in their political endeavors.”

Unlike many other roles in government, the CBO director cannot be fired by the president — the person can be removed only by Congress.

Swagel said the work out of his office is as crucial as ever.

“It’s important for the country to have a group of analysts who don’t have an opinion — who are just saying, ‘Here’s the facts,’” he said.

“We’re not telling Congress what to do,” Swagel said. “We’re not saying if something is good or bad. We’re just saying, ‘Here’s what it costs, here’s what it does.’ And that’s our role.”

By ALEX VEIGA, AP Business Writer

MCLEAN, Va. (AP) — The average rate on a 30-year U.S. mortgage ticked up this week, ending a four-week slide that brought down borrowing costs for homebuyers to the lowest level in nearly a year.

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The rate rose to 6.3% from 6.26% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.08%.

Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also edged higher. The average rate rose to 5.49% from 5.41% last week. A year ago, it was 5.16%, Freddie Mac said.

Mortgage rates are influenced by several factors, from the Federal Reserve’s interest rate policy decisions to bond market investors’ expectations for the economy and inflation. They generally follow the trajectory of the 10-year Treasury yield, which lenders use as a guide to pricing home loans. The yield was at 4.19% in midday trading Thursday, up from 4.16% late Wednesday.

Starting in late July, mortgage rates mostly declined in the lead-up to the Federal Reserve’s widely anticipated decision last week to cut its main interest rate for the first time in a year amid growing concern over the U.S. job market.

The recent downward trend bodes well for prospective homebuyers who have been held back by stubbornly high home financing costs.

The housing market has been in a slump since 2022, when mortgage rates began climbing from historic lows. Sales of previously occupied U.S. homes sank last year to their lowest level in nearly 30 years. And, so far this year, sales are running below where they were at this time in 2024.

This week’s rise in rates could signal a repeat of what happened about a year ago after the Fed cut its benchmark rate for the first time in more than four years. Back then, mortgage rates fell for several weeks prior to the when the Fed cut rates at its September 2024 policy meeting. In the weeks that followed, however, mortgage rates began rising again, eventually reaching just above 7% in mid-January.

Like last year, the Fed’s rate cut doesn’t necessarily mean mortgage rates will keep declining, even as the central bank signals more cuts ahead.

By KEVIN FREKING, Associated Press

WASHINGTON (AP) — The threat of a government shutdown has become a recurring event in Washington, though most of the time lawmakers and the president are able to head it off. This time, however, prospects for a last-minute compromise look rather bleak.

Republicans have crafted a short-term measure to fund the government through Nov. 21, but Democrats have insisted that the measure address their concerns on health care. They want to reverse the Medicaid cuts in President Donald Trump’s mega-bill passed this summer as well as extend tax credits that make health insurance premiums more affordable for millions who purchase through the marketplaces established by the Affordable Care Act. Republicans say that’s all a non-starter.

Neither side is showing any signs of budging, with the House not even expected to be in session before a shutdown has begun.

Here’s a look at how a shutdown would occur.

What happens in a shutdown?

When a lapse in funding occurs, the law requires agencies to cease activity and furlough their “non-excepted” employees. Excepted employees include those who perform work to protect life and property. They stay on the job but don’t get paid until after the shutdown has ended.

During the 35-day partial shutdown in Trump’s first term, roughly 340,000 of the 800,000 federal workers at affected agencies were furloughed. The remainder were “excepted” and required to work.

What government work continues during a shutdown?

A great deal, actually.

FBI investigators, CIA officers, air traffic controllers and agents manning airport checkpoints continue to work. So do members of the Armed Forces.

Those programs that rely on mandatory spending also generally continue during a shutdown. Social Security checks continue to go out. Seniors who rely on Medicare coverage can still go see their doctor and health care providers can still submit claims for payment and be reimbursed.

Veteran health care also continues during a shutdown. VA medical centers and outpatient clinics will be open and VA benefits will continue to be processed and delivered. Burials will continue at VA national cemeteries.

Will furloughed federal workers get paid?

Yes, but not until the shutdown is over.

Congress has historically acted after shutdowns to pay federal workers for the days they were furloughed, though there were no guarantees it would do so. In 2019, however, Congress passed a bill enshrining into law the requirement that furloughed employees get retroactive pay once operations resume.

While they will eventually get paid, the furloughed workers as well as those who remain on the job may have to go without one or more of their regular paychecks, depending upon how long the shutdown lasts, which will create financial stress for many families.

Service members would receive back pay for any missed paychecks once federal funding resumes.

Will I still get mail?

Yes, the U.S. Postal Service is not affected by a government shutdown. The U.S. Postal Service is an independent entity that is funded through the sale of its products and services, and not by tax dollars.

What closes during a shutdown?

All administrations get some leeway to choose which services to freeze and which to maintain in a shutdown.

The first Trump administration worked to blunt the impact of what became the country’s longest partial shutdown in 2018 and 2019. But in the selective reopening of offices, experts say they saw a willingness to cut corners, scrap prior plans and wade into legally dubious territory to mitigate the pain.

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Each federal agency develops its own shutdown plan that in the past was accessible on the Office of Management and Budget’s public website. So far, those plans have not been posted. The plans outline which agency workers would stay on the job during a government shutdown and which would be furloughed.

In a provocative move, the White House’s Office of Management and Budget has threatened the mass firing of federal workers in the event of a shutdown. An OMB memo released Wednesday said those programs that did not get funding through Trump’s mega-bill this summer would bear the brunt of a shutdown.

Agencies should consider issuing reduction-in-force notices for those programs whose funding expires Oct. 1, that don’t have alternative funding sources and are “not consistent with the President’s priorities,” the memo said.

That would be a much more aggressive step than in previous shutdowns when furloughed federal workers returned to their jobs once Congress approved government spending. A reduction in force would not only lay off employees but eliminate their positions, which would trigger yet another massive upheaval in a federal workforce that has already faced major rounds of cuts this year due to efforts from the Department of Government Efficiency and elsewhere in the Trump administration.

Shutdown practices in the past

Many shutdown plans submitted during the Biden administration are publicly available and some plans can be found on individual agency websites, providing an indication of past precedent that could guide the Trump administration.

Here are some excerpts from those plans:

— Education Department: “A protracted delay in Department obligations and payments beyond one week would severely curtail the cash flow to school districts, colleges and universities, vocational rehabilitation agencies, and other entities that depend on the Department’s discretionary funds to support their services.”

— National Park Service: As a general rule if a facility or area is inaccessible during non-business hours, it will be locked for the duration of the lapse in funding. At parks where it is impractical or impossible to restrict public access, staffing will vary by park. “Generally, where parks have accessible park areas, including park roads, lookouts, trails, campgrounds, and open-air memorials, these areas will remain physically accessible to the public.”

— Transportation: Air traffic controller hiring and field training would cease, as would routine personnel security background checks and air traffic performance analysis, according to a March 25 update.

— Smithsonian Institution: “The Smithsonian’s National Zoo and Conservation Biology Institute, like all Smithsonian museums, receives federal funding. Thus, during a government shutdown, the Zoo — and the rest of the Smithsonian museums — must close to the public.”

— Food and Drug Administration: “Work to protect animal health would be limited, only addressing imminent threats to human life. Similarly, food safety efforts … would be reduced to emergency responses, as most of its funding comes from appropriations. Longer-term food safety initiatives, including the prevention of foodborne illnesses and diet-related diseases, would be halted.”

By DEE-ANN DURBIN, AP Business Writer

Starbucks said Thursday it’s closing hundreds of U.S. and Canadian stores and laying off 900 nonretail employees as it focuses more of its resources on a turnaround.

The Seattle coffee giant said store closures would start immediately. The company wouldn’t give a number of stores that are closing, but it said it expects to have 18,300 North American locations when its fiscal year ends on Sunday. As of June 29, the company had 18,734 locations.

In a research note Thursday, TD Cowen analyst Andrew Charles estimated Starbucks will close around 500 stores in its fiscal fourth quarter.

Starbucks said workers in its stores will be offered transfers to other locations where possible and severance packages.

Starbucks said it will notify nonretail employees whose positions are being eliminated early Friday. Starbucks asked employees who can work from home to do so on Thursday and Friday.

In a letter sent to employees Thursday, Starbucks Chairman and CEO Brian Niccol said a review of the company’s stores identified locations where the company doesn’t see a path to financial stability or isn’t able to create the physical environment customers expect. Those stores are being closed.

“Each year, we open and close coffeehouses for a variety of reasons, from financial performance to lease expirations,” Niccol wrote. “This is a more significant action that we understand will impact partners and customers. Our coffeehouses are centers of the community, and closing any location is difficult.”

Starbucks said it expects to spend $1 billion on the restructuring, including $150 million on employee separation benefits and $850 million related to the physical store closing and the cost of exiting leases.

Starbucks shares fell 1% in morning trading Thursday.

It was not immediately clear how many of the stores that are closing are unionized. Workers at 650 company-owned U.S. Starbucks stores have voted to unionize since 2021, but they have yet to reach a contract agreement with the company.

Starbucks Workers United, the labor group organizing workers, said Thursday that the closures were made without input from Starbucks’ baristas. The union said it intends to engage in bargaining at every union-represented store that is closing to ensure workers can be placed at another store they prefer.

“Fixing what’s broken at Starbucks isn’t possible without centering the people who engage with the company’s customers day in and day out,” the union said.

News of the store closures came just over a week after unionized employees in three states sued Starbucks over its new dress code, saying the company refused to reimburse workers who had to buy new clothes.

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Starbucks said it used a consistent set of criteria to determine the stores that are closing and union representation wasn’t a factor.

Starbucks will end its 2025 fiscal year with 124 fewer stores than its previous fiscal year. It’s rare for Starbucks to shrink its store count during a fiscal year.

Niccol said Starbucks plans to increase its North American store count in its next fiscal year. The company said it also plans to redesign more than 1,000 locations in the next 12 months to give them a warmer, more welcoming feel.

This is the second big round of layoffs at Starbucks this year. In February, Niccol announced the layoffs of 1,100 corporate employees globally and eliminated several hundred open positions. At the time, Niccol said Starbucks needed to operate more efficiently and increase accountability for decisions.

Niccol is a turnaround specialist who was brought into Starbucks a year ago this month to give the brand a jolt. Under Niccol’s leadership, the struggling Chipotle chain, where Niccol was CEO for about 6 years, essentially doubled its revenue and its profit, and its stock price soared.

In July, Starbucks reported its sixth straight quarter of lower same-store sales, as weak U.S. traffic continued to be a drain on the company. Niccol is trying to turn that around by adding staff, making stores cozier and introducing software that helps prioritize orders and make sure customers can get their drink within four minutes.