White House Warns Federal Layoffs Possible in Shutdown

The White House warned the government shutdown could move beyond furloughs to permanent layoffs if funding talks fail, with NEC director Kevin Hassett saying layoffs would begin if negotiations are “going absolutely nowhere.” Office of Management and Budget director Russell Vought and other officials have discussed identifying agency cuts, issuing reduction-in-force notices, and OMB sent guidance to agencies to consider RIFs for programs that lose funding. Roughly 750,000 federal workers are affected and many face weeks without pay; officials said some agencies could begin announcing firings within days of the shutdown’s start. Unions are preparing legal challenges, arguing mass dismissals during a shutdown would be unlawful, and critics say the move would break with past practice that guaranteed back pay to furloughed employees. Economists and local officials warn large-scale federal firings would flood regional labor markets with skilled jobseekers, worsening unemployment and prompting out-migration, and the administration’s prior use of the Department of Government Efficiency and abrupt CFPB dismissals underscore the heightened stakes for affected workers.