President Trump vowed mass layoffs and deep cuts to Democrat-backed programs, using the government shutdown as leverage to reshape the federal workforce.
The administration has already frozen $18 billion in infrastructure funds for New York projects tied to Democratic leaders, with layoffs expected to begin within days.
Economists warn the shutdown could furlough 750,000 federal workers, cost $400 million daily in lost wages, and drag down U.S. GDP if it continues into October.
US President Donald Trump has threatened mass layoffs and proposed to make “irreversible” changes to important Democratic programs. Taking the government shutdown as an opportunity, Trump is looking to reshape the federal workforce and punish detractors.
White House press secretary Karoline Leavitt addressed the recent financial lapse and stated that layoffs were "imminent" rather than merely putting workers on furlough. The Office of Management and Budget stated that it was postponing approximately $18 billion in infrastructure money for the Hudson Tunnel and subway projects located in the hometown of the Democratic leaders of the U.S. House and Senate, New York.
According to AP, Trump has expressed admiration for his budget director's handiwork.
“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 Project 2025 conservative policy book.
“So they’re taking a risk by having a shutdown,” Trump said during an event at the White House.
Day two of the shutdown is Thursday, and the dial is already set to high. Some politicians and budget watchers were concerned that if Congress, which is in charge of passing laws to finance the government, failed to fulfil its duties and ceded power to the White House, the Trump administration's aggressive approach would be the result.
Vought informed House GOP lawmakers about layoffs beginning the following day or two during a secret conference call on Wednesday afternoon. It is a continuation of the work done by Elon Musk's Department of Government Efficiency, which sliced through the federal government at the beginning of the year, AP reported.
“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.”
AP reported that the deadlock might continue into October, when government employees who are still employed will start to miss their pay cheques, since there is no simple solution in sight. During the shutdown, an estimated 750,000 federal employees would be placed on furlough, costing the government $400 million in lost salaries every day, according to the nonpartisan Congressional Budget Office.
Economic repercussions might spread to other sectors of the economy. According to the CBO, previous shutdowns "pushed down GDP by reducing aggregate demand in the private sector for goods and services."
