White House Prepares Federal Agencies for Potential Mass Layoffs Amid Shutdown Threat

As the clock ticks toward a potential government shutdown, the White House has directed federal agencies to gear up for significant workforce reductions, escalating tensions in an already heated funding battle. A memo from the Office of Management and Budget, issued late Wednesday, instructs agencies to draft plans for layoffs, known in federal terms as reduction-in-force notices. These would target employees in programs reliant on discretionary funding set to expire on October 1, or those without alternative funding sources. The directive goes a step further, suggesting notices for staff in initiatives deemed inconsistent with current administration priorities.

These layoff preparations would supplement any temporary furloughs, where non-essential workers are sent home without pay during a shutdown. The memo emphasizes that programs lacking mandatory funding infusions would suffer the most, urging continued planning in case of a partisan impasse. It attributes any potential disruption to opposition decisions, while highlighting that essential services like Social Security, Medicare, veterans’ benefits, military operations, law enforcement, border security, and air traffic control would remain unaffected, as they are protected by statute.

Officials express optimism that a shutdown can be averted, advocating for a straightforward continuing resolution to maintain funding beyond September 30. Past shutdowns have typically involved temporary furloughs for non-critical staff, with essential workers continuing unpaid until retroactive compensation is provided. Permanent layoffs, however, represent a rarer and more drastic measure.

Critics, including a former budget official, have decried the approach as self-inflicted damage, arguing it unnecessarily depletes national expertise and serves as a form of extortion in funding negotiations. Democratic leaders in the Senate and House have dismissed the memo as an intimidation tactic, vowing not to yield and predicting that any dismissed workers would likely be rehired.
With the fiscal year ending on September 30, Congress faces a Wednesday shutdown if no agreement is reached.

A short-term funding bill advanced by Republicans cleared the House but stalled in the Senate, falling short of the required votes. Republicans, holding a slim majority, need bipartisan support to proceed, while Democrats seek concessions such as reversing recent Medicaid reductions and extending health insurance tax credits. A planned meeting between the president and Democratic leaders was abruptly canceled, with the administration labeling the opposing demands as unproductive.