Trump Administration Leverages Government Shutdown to Reshape Federal Workforce with Mass Layoffs

As the government shutdown enters its second day, President Donald Trump is leveraging this situation to reshape federal employment and penalize opponents, threatening widespread dismissals and suggesting permanent cuts to programs valued by Democrats.

Rather than implementing standard furloughs during the funding lapse, White House Press Secretary Karoline Leavitt declared that layoffs were "imminent." The Office of Management and Budget has suspended approximately $18 billion designated for New York's subway and Hudson Tunnel infrastructure projects—initiatives in the home territory of Democratic congressional leadership.

Trump has expressed admiration for his budget director's approach. "He can trim the budget to a level that you couldn't do any other way," the president remarked about OMB Director Russ Vought, who helped craft the conservative policy blueprint Project 2025. Trump added during a White House event, "So they're taking a risk by having a shutdown."

With day two of the shutdown underway, tensions are escalating rapidly. The Trump administration's aggressive stance represents what lawmakers and budget analysts feared might happen if Congress failed to fulfill its funding responsibilities, effectively surrendering control to the executive branch.

During a private conference call with House Republican lawmakers on Wednesday afternoon, Vought indicated layoffs would begin within days. This continues the Department of Government Efficiency's work under Elon Musk that drastically reduced federal employment earlier this year.

"These are all things that the Trump administration has been doing since January 20th," observed House Democratic Leader Hakeem Jeffries, referring to the president's inauguration day. "The cruelty is the point."

Without a clear resolution in sight, the standoff risks extending deeper into October, when federal employees still working will miss paychecks. The Congressional Budget Office estimates approximately 750,000 federal workers would face furlough daily during the shutdown, resulting in $400 million in lost wages per day.

Economic impacts could extend beyond government. Previous shutdowns demonstrated "reduced aggregate demand in the private sector for goods and services, pushing down GDP," according to the CBO. The agency noted that "Stalled federal spending on goods and services led to a loss of private-sector income that further reduced demand for other goods and services in the economy," though these effects reversed once normal operations resumed.

"The longer this goes on, the more pain will be inflicted," warned House Speaker Mike Johnson, R-La., "because it is inevitable when the government shuts down."

No immediate meetings between Trump and congressional leadership are scheduled. Congress has no planned activity Thursday due to a Jewish holiday observance, with senators returning Friday and House members resuming next week.

Democrats remain firm in their demand to maintain healthcare funding, refusing to support legislation that fails to do so while warning of potential nationwide premium increases. The Kaiser Family Foundation projects insurance premiums will more than double for individuals purchasing policies through Affordable Care Act exchanges.

Republicans have indicated willingness to discuss healthcare concerns but maintain that such matters can wait since subsidies helping people purchase private insurance remain in effect until year's end.

"We're willing to have a conversation about ensuring that Americans continue to have access to health care," Vice President JD Vance stated Wednesday at the White House.

With legislative action stalled, the Trump administration is exercising new authority to reshape federal government operations.

The administration can access funds to pay Defense Department and Homeland Security workers through provisions in what's commonly called the "One Big Beautiful Bill" passed this summer, according to CBO estimates.

This ensures Trump's immigration enforcement and deportation initiatives continue uninterrupted, while employees at many other agencies must wait for government reopening before receiving paychecks.

Earlier this year, Budget Director Vought challenged congressional authority by attempting to reclaim funds already approved for Head Start, clean energy projects, international aid, and public broadcasting.

The Government Accountability Office has issued several unusual notices identifying instances where administration actions violated legal requirements. However, the Supreme Court recently allowed the administration's "pocket rescission" of nearly $5 billion in foreign aid to proceed.