Trump administration signals layoffs as shutdown drags on

The Trump administration warned it may begin mass layoffs of federal workers if negotiations with congressional Democrats fail to end the partial government shutdown, a senior White House official said on October 5.

White House National Economic Council Director Kevin Hassett told CNN that while President Donald Trump and Budget Director Russ Vought were prepared to act, they were hoping layoffs could be avoided. Later the same day, Trump suggested the process was already underway, stating: “It’s taking place right now,” Reuters quotes him as saying.

The shutdown, now in its fifth day, began on October 1, the start of fiscal 2026, after Senate Democrats rejected a short-term funding bill that would have kept federal agencies open through November 21. The Office of Management and Budget did not comment on the potential layoffs.

So far, there have been no substantive negotiations between congressional leaders and the White House since Trump met with them last week. Senate Democratic leader Chuck Schumer said the stalemate could only be resolved through talks with the president and congressional leadership.

Democrats are demanding a permanent extension of enhanced premium tax credits under the Affordable Care Act (ACA) and assurances that the White House will not unilaterally cancel agreed-upon spending. Republicans, including Senate Majority Leader John Thune, have signalled willingness to address these concerns, but only after the government reopens. Trump reiterated the need to reform the ACA, describing it as “a disaster for the people.”

Rank-and-file senators have held informal talks on healthcare and other issues, but progress remains limited. Senator Ruben Gallego told CNN that no deal has been reached.

On October 6, the Senate is set to vote for a fifth time on both the Republican stopgap funding bill, already passed by the House, and a Democratic alternative. Neither measure is expected to reach the 60-vote threshold needed to advance. With a 53-47 Republican majority in the Senate and one Republican opposed to the House measure, at least eight Democrats would need to cross party lines, yet only three have so far.

Thune warned, “It’s open up the government or else… That’s really the choice that’s in front of them right now.”

By Vugar Khalilov