White House threatens federal layoffs amid US government shutdown

White House threatens federal layoffs amid US government shutdown

The White House has threatened mass layoffs of federal workers if congressional funding talks remain stalled amid a growing U.S. government shutdown. As the shutdown entered its fifth day, top aides warned that if negotiations go “absolutely nowhere,” job cuts will begin.

National Economic Council Director Kevin Hassett told CNN that President Trump and Budget Director Russ Vought are preparing for layoffs as a worst-case measure, though they hope an agreement can still be reached to avoid that outcome. Trump himself, when asked whether firings had begun, responded, “It’s taking place right now.”

Key points fueling the danger of layoffs include a standoff between Republicans and Democrats over federal budget priorities. Democrats are pushing to permanently extend premium tax credits under the Affordable Care Act, while Republicans resist increased spending. Despite the impasse, Senate votes on both Republican and Democratic funding bills are unlikely to pass due to a lack of bipartisan support.

Labor unions have already sued the Office of Management and Budget and the Office of Personnel Management, arguing that threatening mass layoffs during a shutdown may run afoul of federal law, including the Antideficiency Act. Some senior government officials have privately warned agencies not to carry out reductions in force (RIFs) yet, citing legal concerns and the precedent of prior shutdown protocols.

The stakes are high: around 750,000 federal employees could be affected by furloughs or unpaid work during the shutdown. The financial pressure is mounting on both sides in Washington as the shutdown drags into a new week without resolution.