White House Warns of Mass Layoffs as U.S. Government Shutdown Deepens

The White House has issued a warning that if US President Donald Trump determines that talks with congressional Democrats to resolve a partial government shutdown have come to a standstill, mass layoffs of federal employees may start.

White House National Economic Council Director Kevin Hassett told CNN’s State of the Union show on 5 September, as the shutdown reached its fifth day, that he thought there was still a chance Democrats would give up and prevent what may turn out to be an expensive political and economic catastrophe.

“President Trump and Russ Vought are lining things up and getting ready to act if they have to, but hoping that they don’t,” Hassett added, referring to the White House budget director. Layoffs will begin if the president determines that the negotiations are completely failing.

Trump Termed it as ‘Democratic Layoffs’

“Anybody laid off, that’s because of the Democrats,” Trump told reporters on 5 September, referring to the possible layoffs as “Democrat layoffs”. Despite the ongoing government shutdown, Trump was present at a US Navy anniversary event in Norfolk, Virginia, on September 5. “I think the show has to go on!” Before leaving the White House for Naval Station Norfolk, Trump posted on Truth Social that it was “a show of Naval aptitude and strength.”

However, Trump accused Democrats of inciting the shutdown and attempting “to destroy this wonderful celebration of the US Navy’s Birthday”, putting the occasion at risk of becoming embroiled in partisan hostilities. Since Trump’s last meeting with congressional leaders, no substantive talks have taken place. The standoff started on October 1, the first day of the federal fiscal year, when Senate Democrats rejected a short-term funding plan that would have kept government departments operating until November 21.

Senate Democratic leader Chuck Schumer stated on the CBS show Face the Nation that only new negotiations between Trump and legislative leaders could break the impasse, saying, “They’ve refused to talk with us.” Democrats are calling for guarantees that the White House will not unilaterally reduce expenditure agreed upon in any agreement, as well as a permanent renewal of the enhanced premium tax credits under the Affordable Care Act (ACA).

Till Now No Conclusive Decision Taken

In an attempt to break the impasse, rank-and-file senators from both parties have had informal discussions on spending and healthcare, but little has changed. When asked if senators were closer to reaching an agreement, Democratic Senator Ruben Gallego responded to CNN, “At this point, no.” On 6 September, the Senate will vote once more on two duelling financing measures, one supported by the Democratic-led House and the other by Republicans.

However, neither one is anticipated to receive the 60 votes needed to move forward. As long as the shutdown lasts, around 750,000 federal employees could be placed on furlough, with an estimated $400 million in lost wages every day, according to the Congressional Budget Office. The 2019 Government Employee Fair Treatment Act guarantees backpay to federal employees, but payments won’t start until the closure is finished.