Shutdown Showdown: No End in Sight as Trump Prepares Layoffs, Agency Cuts/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ The U.S. government shutdown entered its third day Friday with no deal in sight. President Donald Trump is preparing mass layoffs and deep agency cuts, escalating pressure on Democrats. Senate negotiations remain stalled as both parties trade blame over expiring Affordable Care Act subsidies.
Key Points
- Shutdown Day 3: No agreement in sight as Senate prepares another vote.
- Democrats’ Demand: Extension of Affordable Care Act (ACA) tax credits to prevent health insurance costs from spiking.
- White House Strategy: Trump calls shutdown an “opportunity” for permanent cuts; budget director Russ Vought withholds funds from Democratic states.
- Economic Fallout: 750,000 federal workers could lose $400M in wages each day.
- Political Blame Game: Both parties working overtime to frame the narrative before voters.
Hopes for Quick End to US Government Shutdown Fade as Trump Plans Layoffs and Cuts
WASHINGTON — The standoff over the government shutdown deepened Friday, with little sign of resolution as President Donald Trump prepared sweeping layoffs and agency cuts while Republicans and Democrats dug in for what could be a prolonged battle.
Senate Gridlock
The Senate is scheduled for another vote Friday, but expectations are low. Republicans are pushing a House-passed bill to reopen government temporarily at current funding levels. Democrats continue to block it, demanding action on health care.
“Until they have eight or hopefully more — 10 or more — people who want to end the government shutdown, I’m not sure this goes anywhere,” Senate Majority Leader John Thune admitted.
Although Republicans hold the White House and both chambers, Senate filibuster rules mean they need 60 votes out of 100. Democrats, with 47 seats, are leveraging their power to force negotiations.
Their core demand: extend ACA marketplace tax credits first boosted during the COVID-19 pandemic. Without them, health insurance premiums could surge for millions.
Democrats Dig In
House Democratic leader Hakeem Jeffries stood outside the Capitol Thursday and warned:
“Over the last few days and over the next few days, more than 20 million Americans will see dramatically increased health care premiums, co-pays and deductibles because of the Republican unwillingness to extend the Affordable Care Act tax credits.”
Jeffries dismissed Trump’s threats to cut agencies or fire workers, saying the “cruelty” would only backfire politically.
Trump’s Shutdown Gamble
Trump has branded the shutdown an “unprecedented opportunity” to downsize government. Unlike past shutdowns, where furloughs were temporary, the administration is openly preparing permanent layoffs.
- Russ Vought, Trump’s budget director, has already frozen nearly $18 billion in infrastructure funds for New York, targeting projects in states led by Democrats.
- The administration also announced the cancellation of $7.6 billion in clean energy grants spread across 16 Democratic states.
House Speaker Mike Johnson defended the GOP’s stance, saying Democrats caused “real pain” by blocking Republican funding bills three times in a row.
Economic Stakes
The Congressional Budget Office (CBO) estimates:
- 750,000 federal workers furloughed daily.
- $400 million in lost wages every day.
- Ripple effects on consumer demand, risking slower GDP growth.
Past shutdowns have reduced aggregate demand, cutting private-sector income and temporarily lowering GDP.
Treasury Secretary Scott Bessent warned Thursday the shutdown could “hit growth and working America.”
Who Gets the Blame?
In past shutdowns, both parties suffered reputational damage, but this one may be different. Unlike 2018–19, when Trump bore the brunt over his border wall fight, Democrats are the ones making new policy demands.
Still, both sides are aggressively shaping the narrative:
- The White House is running a partisan campaign, using memes and agency websites to attack Democrats.
- Democrats insist Republicans are holding health care hostage and risking higher costs for American families.
Both Jeffries and Johnson show little sign of compromise, with Democrats now pushing for a permanent extension of ACA subsidies.
Early Bipartisan Talks — But No Breakthrough
Some senators are floating a short-term compromise: extend ACA tax credits for one year while reopening government for several weeks. But leadership on both sides has shown little interest.
Sen. Amy Klobuchar (D-MN) urged Republicans to join negotiations:
“The expiration of ACA subsidies impacts families in red states and blue states alike — farmers, ranchers, small business owners. Unfortunately, Republicans are not working with us on a bipartisan agreement.”
Senators appeared resigned to letting the shutdown stretch into next week, with Thune saying failed votes Friday would mean “the weekend to think about it.”
Outlook
The shutdown — now in its third day — shows no signs of ending quickly. With Trump signaling long-term cuts and Democrats holding out on health care, Americans face growing uncertainty, from missed paychecks to rising insurance costs.
The longer the stalemate drags on, the more severe the economic and political consequences could become for both parties.
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