US President Donald Trump has seized on the government shutdown as an opportunity to reshape the government and punish detractors by threatening to fire more federal workers en masse and hinting at “irreversible” cuts to social programmes.
Rather than simply furlough employees, as is usually done during any lapse in funds, White House Press Secretary Karoline Leavitt said layoffs were “imminent”. The Office of Management and Budget (OMB) announced it was putting on hold roughly $18 billion in infrastructure funds slated for subway and Hudson Tunnel projects in New York – the hometown of the Democratic leaders of both the House and the US Senate.
Trump has marveled over his budget director.
“He can trim the budget to a level that you couldn’t do any other way,” the president said at the start of the week of OMB Director Russ Vought, who was also a chief architect of the far-right Project 2025 "wish list", which Trump has disavowed but which has seemingly informed many of his policy choices since his return to power.
“So they’re taking a risk by having a shutdown,” Trump said of Democrats during an event at the White House.
750,000 federal workers could be furloughed
The aggressive approach coming from the Trump administration is what certain lawmakers and budget observers feared if Congress, which has the responsibility to pass legislation to fund the government, failed to do its work and relinquished control to the White House.
In a private conference call with House GOP lawmakers Wednesday afternoon, Vought told them of layoffs starting in the next day or two, an extension of the imprudent slashing of government workers and programmes undertaken by the self-proclaimed "Department of Government Efficiency" under Elon Musk at the start of the year.
“These are all things that the Trump administration has been doing since January 20th,” said House Democratic leader Hakeem Jeffries, referring to the president’s first day in office.
“The cruelty is the point.”
With no easy endgame at hand, the stand-off risks dragging into October, when federal workers who remain on the job will begin missing paychecks.
The nonpartisan Congressional Budget Office (CBO) has estimated that roughly 750,000 federal workers would be furloughed on any given day during the shutdown, a loss of $400 million daily in wages.
Read moreUS government shuts down as lawmakers fail to break budget impasse
‘Pain will be inflicted’
The economic effects could spill over into the broader economy. Past shutdowns saw “reduced aggregate demand in the private sector for goods and services, pushing down GDP”, the CBO said.
“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,” it said.
Overall, CBO said there was a “dampening of economic output” but that reversed once people returned to work.
“The longer this goes on, the more pain will be inflicted,” said Republican House Speaker Mike Johnson of Louisiana, “because it is inevitable when the government shuts down”.
Trump and the congressional leaders are not expected to meet again soon. Congress has no action scheduled Thursday in observance of the Jewish holy day of Yom Kippur, with senators due back on Friday.
The House is set to resume session next week.
Healthcare funding at heart of conflict
The Democrats are holding fast to their demands to preserve healthcare funding and refusing to back any budget bill that fails to do so, warning of an untenable rise in prices for millions of Americans nationwide. The Kaiser Family Foundation estimates insurance premiums will more than double for people who buy policies on the Affordable Care Act exchanges, also known as Obamacare.
The Republicans have opened a door to negotiating the healthcare issue, but GOP leaders say it can wait, since the subsidies that help people purchase private insurance don’t expire 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 said Wednesday at the White House.
ICE agents still at work
With Congress as a standstill, the Trump administration has taken advantage of new levers to determine how to shape the federal government.
The Trump administration can tap into funds to pay workers at the Defense Department and Homeland Security from what’s commonly called the “One Big Beautiful Bill” that was signed into law this summer, according to CBO.
That would ensure Trump’s immigration enforcement and mass deportation agenda is uninterrupted. But employees who remain on the job at many other agencies will have to wait for government to reopen before they get a paycheck.
Read more‘I couldn’t breathe’: ICE agents fire tear gas at peaceful protesters in Chicago suburb
Already Vought, from the budget office, has challenged the authority of Congress this year by trying to claw back and rescind funds lawmakers had already approved – for Head Start, clean energy infrastructure projects, overseas aid, and public radio and television.
The Government Accountability Office has issued a series of rare notices of instances where the administration’s actions have violated the law.
But the Supreme Court in a ruling late last week allowed the administration’s so-called “pocket rescission” of nearly $5 billion in foreign aid to stand.
(FRANCE 24 with AP)
English (US) · 