Trump targets government workers, halts important Projects
President Donald Trump has leveraged the government shutdown as a chance to transform the federal workforce and retaliate against critics, by threatening widespread layoffs of employees and proposing permanent reductions to programs significant to Democrats. Instead of the typical approach of furloughing employees during a funding shortfall, White House press secretary Karoline Leavitt stated that layoffs were imminent. The Office of Management and Budget has announced a pause on approximately USD 18 billion in infrastructure funds designated for New York’s subway and Hudson Tunnel projects, located in the home state of the Democratic leaders of the US House and Senate. Trump has expressed admiration for the efforts of 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, referring to 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. Thursday marks the second day of the shutdown, and the intensity is already elevated. The assertive stance taken by the Trump administration is precisely what some lawmakers and budget analysts anticipated if Congress, tasked with the duty of passing legislation to fund the government, neglected its responsibilities and ceded authority to the White House. During a private conference call with House GOP lawmakers on Wednesday afternoon, Vought informed them about impending layoffs set to begin within the next day or two. It represents a continuation of the Department of Government Efficiency initiatives initiated by Elon Musk, which aimed to streamline operations within the federal government at the beginning of the year.
“These are all things that the Trump administration has been doing since January 20th,” said House Democratic leader Hakeem Jeffries. The standoff shows no signs of resolution, threatening to extend further into October, at which point federal employees who continue to work will start to miss their paychecks. The nonpartisan Congressional Budget Office has estimated that approximately 750,000 federal workers would be furloughed on any given day during the shutdown, resulting in a daily loss of USD 400 million in wages. The economic effects may extend into the wider economy. The previous shutdowns resulted in diminished aggregate demand within the private sector for goods and services, leading to a decline in GDP. According to the report, stalled federal spending on goods and services resulted in a loss of private-sector income, which in turn diminished demand for other goods and services in the economy. Overall, there was a dampening of economic output; however, this trend reversed once individuals returned to work. “The longer this goes on, the more pain will be inflicted,” said House Speaker Mike Johnson, R-La, “because it is inevitable when the government shuts down.”
Trump and the congressional leaders are not anticipated to convene again in the near future. In observance of the Jewish holy day, Congress has no action scheduled for Thursday, with senators expected to return on Friday. The House is scheduled to reconvene next week. The Democrats remain steadfast in their insistence on maintaining health care funding, rejecting any bill that does not meet this requirement, and cautioning about potential price increases affecting millions of Americans across the country. The Kaiser Family Foundation estimates that insurance premiums will more than double for individuals purchasing policies on the Affordable Care Act exchanges. The Republicans have initiated discussions regarding the health care issue; however, GOP leaders assert that it can be postponed, as the subsidies aiding individuals in acquiring private insurance remain valid until the end of the year. “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. Amidst a standstill in Congress, the Trump administration has seized the opportunity to utilize new levers in shaping the federal government.
The Trump administration has the ability to access funds to compensate workers at the Defence Department and Homeland Security from what is often referred to as the One Big Beautiful Bill, which was enacted this summer. That would guarantee the continuity of Trump’s immigration enforcement and mass deportation agenda. However, employees who continue to work at numerous other agencies will need to wait for the government to reopen before receiving their paychecks. Vought, from the budget office, has already challenged Congress’s authority this year by attempting to reclaim and rescind funds that lawmakers had previously approved for Head Start, clean energy infrastructure projects, overseas aid, and public radio and television. The Government Accountability Office has released a series of uncommon notices regarding instances in which the administration’s actions have breached the law. However, the Supreme Court, in a ruling issued late last week, permitted the administration’s so-called pocket rescission of nearly USD 5 billion in foreign aid to remain in effect.
