usbudgetcrisis

Washington, D.C. – October 6, 2025 – White House National Economic Council Director Kevin Hassett warned that mass layoffs of federal workers could begin during the ongoing government shutdown if President Donald Trump determines that negotiations with Democrats have reached a deadlock. Speaking on CNN's "State of the Union," Hassett expressed hope that Democrats would act sensibly to avoid job cuts, urging a resolution when lawmakers return to Washington on Monday.
Hassett stated that the administration, in coordination with Budget Director Russ Vought, is preparing for potential workforce reductions if talks falter. "If the president decides that the negotiations are absolutely going nowhere, then there will start to be layoffs," he said, adding that a fresh start next week could prevent such measures if Democrats embrace "common sense" solutions. Trump echoed this, noting that layoff targets are being identified, framing any cuts as "Democrat layoffs" tied to stalled progress.
Shutdown Stalemate: Funding Bill Deadlock Persists
The partial shutdown, now in its sixth day since October 1, stems from a failure to extend temporary funding, halting non-essential operations and furloughing over 2 million federal employees. The dispute centers on a $1.7 trillion discretionary spending package for fiscal year 2026, with House Republicans pushing for deep cuts to domestic programs, increased border security, and reversals of Democratic policies like Medicaid expansions. A House-passed continuing resolution to extend funding through November 21 stalled in the Senate, where Democrats demand protections for Affordable Care Act subsidies and safeguards against executive fund rescissions.
No significant progress has emerged since Trump's recent meeting with congressional leaders, with lawmakers adjourning for the weekend. Senate Minority Leader Chuck Schumer and House Minority Leader Hakeem Jeffries have accused Republicans of undermining essential services, while Arizona Senator Ruben Gallego noted bipartisan Senate talks but emphasized Democrats' firm stance on healthcare.
Economic Toll and Layoff Preparations
Hassett highlighted the shutdown’s economic impact, estimating a $15 billion weekly GDP hit, equivalent to 0.1% quarterly growth. Disruptions have affected national parks, passport services, and veterans’ benefits, with military personnel working unpaid. Preparations for layoffs target non-essential agencies, aligning with Trump’s push to streamline the federal workforce. The administration has already dismissed members of the National Council on the Humanities, signaling a broader restructuring agenda.
Hopes for Monday Breakthrough
With lawmakers reconvening Monday, Hassett urged Democrats to support a clean funding bill to avert layoffs. "If Democrats act sensibly upon returning to the city, there would be no reason for layoffs," he said. House Speaker Mike Johnson and Senate Majority Leader John Thune remain resistant to short-term extensions without spending concessions, though moderate Republicans worry about economic fallout ahead of 2026 midterms.
The threat of layoffs risks deepening partisan divides and eroding public trust. As negotiations teeter, Monday’s talks will determine whether compromise prevails or the shutdown escalates, balancing Trump’s fiscal vision against the urgent need for economic stability and governance continuity.

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