Trump Uses Shutdown to Threaten Mass Layoffs and Cuts/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ President Donald Trump is leveraging the government shutdown to impose mass layoffs, block billions in Democratic-led infrastructure projects, and reshape the federal workforce. His administration has warned of “irreversible” cuts, signaling a harder line than previous shutdowns. Democrats accuse Trump of weaponizing the crisis for political punishment.
Shutdown Power Struggle Quick Looks
- Trump escalates shutdown by threatening permanent layoffs instead of furloughs
- $18 billion halted for New York subway and Hudson Tunnel projects
- OMB chief Russ Vought directs agencies to prepare mass firings
- Trump praises Vought, calling him able to cut budgets “no other way”
- Democrats accuse Trump of political retribution and cruelty
- Shutdown enters day two with 750,000 federal workers sidelined
- Daily loss estimated at $400 million in wages
- Democrats hold firm on Affordable Care Act subsidies
- Republicans open to talks, but only after government reopens
- Supreme Court recently allowed Trump’s “pocket rescission” of aid funds
Trump Uses Shutdown to Threaten Mass Layoffs and Cuts
Deep Look
WASHINGTON — On the second day of the U.S. government shutdown, President Donald Trump is wielding the crisis as a political and fiscal weapon, threatening mass layoffs of federal workers and freezing billions in infrastructure funding tied to Democratic leaders.
Instead of the traditional approach of furloughing employees until lawmakers reach a deal, the White House signaled a more permanent reshaping of the federal workforce.
Press Secretary Karoline Leavitt confirmed layoffs were “imminent,” while the Office of Management and Budget (OMB) suspended $18 billion in funding for New York City transit projects, including the Second Avenue subway expansion and Hudson River rail tunnel. Both projects are closely tied to Senate Democratic leader Chuck Schumer.
“This is an opportunity to trim government in ways Congress never would,” Trump told reporters, praising OMB Director Russ Vought, a leading architect of the Project 2025 conservative agenda. “They’re taking a big risk by letting this shutdown happen.”
A Shutdown Unlike Past Ones
The aggressive posture is already drawing criticism. While prior shutdowns typically focused on stalled negotiations over federal spending, this one has morphed into a test of presidential power over the bureaucracy.
On a private call with Republican lawmakers, Vought told them that agencies should prepare for layoffs within days. The move extends the work of the Department of Government Efficiency, spearheaded earlier this year under Elon Musk, which slashed thousands of federal jobs.
Democratic leader Hakeem Jeffries accused Trump of deliberately using the shutdown as punishment. “The cruelty is the point,” he said.
Economic Impact Looms
The Congressional Budget Office (CBO) estimates that 750,000 federal workers could be furloughed daily, costing $400 million in wages each day. The longer the shutdown drags on, the greater the risks for consumer spending, GDP, and market stability.
Past shutdowns have shown that reduced federal spending leads to weaker private-sector demand, lower income, and slower economic output. Although lost activity typically rebounds after government restarts, the interim pain can ripple through entire sectors, from contractors to retail businesses.
House Speaker Mike Johnson warned, “The longer this goes on, the more pain will be inflicted — because it’s inevitable when government shuts down.”
Healthcare at the Core of the Standoff
At the heart of the impasse is Democrats’ demand to extend Affordable Care Act subsidies that keep premiums down for millions. Without action, the Kaiser Family Foundation projects premiums could more than double.
Republicans have said they are open to talks on health care but only after the government is reopened.
Vice President JD Vance emphasized: “We’re willing to have a conversation, but we won’t cave to demands that shut down the government.”
White House Seeks Control of Federal Spending
The Trump administration has also sought to claw back already-approved funds for programs ranging from Head Start to clean energy and public broadcasting. The Government Accountability Office (GAO) has flagged multiple legal violations, but Trump recently won a Supreme Court victory when the justices allowed his administration’s “pocket rescission” of $5 billion in foreign aid.
With Congress deadlocked and no meetings scheduled until after the Jewish holiday, the White House has assumed unusual leverage in shaping spending priorities, especially in defense and immigration. Funds from the administration’s “One Big Beautiful Bill” ensure that Trump’s mass deportation and immigration enforcement agenda continues unaffected, even as other agencies brace for layoffs.
A Shutdown Without an Endgame
So far, neither side has crafted a viable exit plan. Democrats remain firm on health care subsidies. Republicans, emboldened by Trump’s hard line, refuse to negotiate until the government reopens.
With the federal workforce under threat of permanent restructuring and public services at risk, the standoff underscores how shutdowns under Trump differ from those of the past: less about temporary gridlock, and more about redefining government itself.
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