AP: U.S. Government shutdown takes hold with mass layoffs looming and no end in sight

10:51 03.10.2025 •

The U.S. Government Shut Down
Pic.: Forbes

The federal government was thrown into a shutdown Wednesday with no easy endgame in sight, as Democrats held firm to their demands to salvage health care subsidies that President Donald Trump and Republican in Congress have dismissed as something to possibly discuss later, AP writes.

The White House threatened mass layoffs of federal workers, rather than simply the normal furloughs, in a matter of days, seizing the chance to slash government. Blame was being cast on all sides. No new talks were scheduled after the president failed this week to secure a deal with congressional leaders.

Roughly 750,000 federal workers were expected to be furloughed, and some fired, by Trump’s Republican administration. Many offices will be shuttered, perhaps permanently, as the president promises to zero in on programs Democrats like. Trump’s deportation agenda is likely to run full speed ahead, while education, environmental and other services sputter. The economic fallout could ripple across the nation.

Democrats believe their health care campaign is what House Leader Hakeem Jeffries called a “moral” issue, but cracks are emerging within the party. A Senate vote on the GOP plan to fund the government without the health subsidies failed, but it drew some Democratic support.

“I certainly pray they will come to their senses,” House Speaker Mike Johnson said, flanked by GOP leaders at the Capitol.

This is the third time Trump has presided over a federal funding lapse and the first since his return to the White House this year. His record underscores the polarizing divide over budget priorities in a political climate that rewards hard-line positions rather than more traditional compromises.

Plenty of blame, but no exit strategy

The Democrats picked this fight, which was unusual for the party that prefers to keep government running, but their voters are eager to challenge the president’s second-term agenda. Democrats are demanding funding for health care subsidies that are expiring for millions of people under the Affordable Care Act, causing the insurance premiums to spike nationwide.

Republicans have have encouraged Trump to steer clear of any talks.

What neither side has devised is an easy off-ramp to prevent what could become a protracted closure. The ramifications are certain to spread beyond the political arena, upending the lives of Americans who rely on the government for benefit payments, work contracts and the many services being thrown into turmoil.

Trump’s Office of Management and Budget, headed by Russ Vought, directed agencies to execute plans not just for furloughs, which are typical during a federal funding lapse, but mass firings of federal workers.

Economic fallout expected to ripple nationwide

An economic jolt could be felt in a matter of days.

Wall Street veered toward losses before the opening bell Wednesday as the shutdown went into effect just after midnight, but stocks hit more record highs later in the day.

The Medicare and Medicaid health care programs are expected to continue, though staffing shortages could mean delays for some services. The Pentagon would still function. And most employees will stay on the job at the Department of Homeland Security.

But Trump has warned that the administration could focus on programs that are important to Democrats, “cutting vast numbers of people out, cutting things that they like, cutting programs that they like.”

Divisions within the Democrats are apparent, as three senators again crossed over to join Republicans. One Republican opposed the GOP plan.

‘A lot’ of workers could be fired if the US government shuts down, Trump says

Previous shutdowns have led to the furloughing of hundreds of thousands of federal workers. But the White House has suggested in recent days that a future government closure could provide an opening for federal departments and agencies to permanently fire staff deemed “non-essential”.

Speaking to reporters at the White House earlier on Tuesday, Trump was asked how many federal workers his administration planned to lay off. The president replied: “We may do a lot, and that’s only because of the Democrats.”

The most recent government shutdown took place during the first Trump administration, lasting more than a month and resulting in the furlough of about 800,000 workers.

The non-partisan Congressional Budget Office on Tuesday said it expected that about 750,000 workers could be furloughed this time, at a cost of roughly $400mn per day.

The CBO estimated the last shutdown reduced economic output by $11bn, including $3bn that was never regained.

The survey found 32 per cent of likely voters said they would blame the president

In recent weeks, Republicans pushed for a short-term agreement, or a continuing resolution, that would keep the government funded at current levels until November 21. But Democrats refused to sign it, arguing it should include an extension to health insurance subsidies that are due to expire at the end of the year.

Massachusetts Democrat Elizabeth Warren on Tuesday told CNN: “Sometimes you have got to stand and fight, and a fight to protect Americans who can’t afford their healthcare is a fight worth having.”

Many Democrats are reeling from the party’s disappointing showing in last year’s elections. The party has struggled to mount an effective opposition to the blistering pace of Trump’s second administration. But its leaders say they are confident voters will reward their tough stance when it comes to the shutdown.

A poll conducted earlier this month by Data for Progress, the progressive pollster, suggested a majority of voters would blame Trump or congressional Republicans for a government shutdown.

The survey found 32 per cent of likely voters said they would blame the president, while 27 per cent would also blame Republicans in Congress. Just over a third would blame congressional Democrats.

 

read more in our Telegram-channel https://t.me/The_International_Affairs