The White House Office of Management and Budget (OMB) has instructed federal agencies to prepare for sweeping layoffs in the event of a government shutdown, marking a sharp break from how past shutdowns were handled. According to a memo obtained by CNN, agencies were told to identify programs whose funding would lapse if Congress fails to pass a budget by the September 30 deadline, and to target them for permanent job cuts if they are deemed inconsistent with President Donald Trump’s priorities.
The directive signals an escalation in the ongoing standoff between the Trump administration and congressional Democrats over government funding. In the memo, OMB said it remained hopeful Democrats would avoid a shutdown, but warned that preparations for reductions in force must still proceed. The office has not posted agencies’ updated shutdown contingency plans on its website, an unusual step with less than a week left before funding expires.
Democrats condemned the memo as an intimidation tactic. Senate Minority Leader Chuck Schumer accused Trump of using federal workers as pawns. “Donald Trump has been firing federal workers since day one,not to govern, but to scare,” Schumer said. He argued that the mass layoffs would either be overturned in court or force the administration to rehire workers, as happened earlier.
The administration, however, has framed the plan as a way to preserve core priorities while eliminating non-essential functions. OMB described Democrats’ insistence on tying an extension of Affordable Care Act subsidies to the funding bill as “insane,” reiterating its demand for a “clean” extension without concessions. Trump canceled a meeting with Democratic leaders earlier in the week, signaling a hard line.
The threat of layoffs adds pressure to the partisan showdown. Democrats want to extend enhanced federal subsidies for health coverage, while Republicans have resisted. Without a funding agreement, nearly 900,000 federal workers could face furloughs, while more than 1.4 million deemed essential would be required to work without pay until appropriations are restored.
The OMB directive is the latest step in Trump’s broader effort to shrink the federal workforce. Earlier in the year, an executive order directed agencies to draw up large-scale reduction plans. Some agencies implemented deep staff cuts, others scaled back, and some even recalled dismissed employees. The new shutdown memo builds on those efforts, calling for a review of all functions not mandated by law or regulation.
Shutdowns typically disrupt government services, though essential functions like Social Security payments, law enforcement, border patrol, and air traffic control continue. Past shutdowns have closed national parks, delayed immigration hearings, canceled food inspections, and stalled loans for businesses and homebuyers.
Labor groups and policy advocates have sharply criticised the memo. The National Treasury Employees Union said it was unaware of the directive, while the American Federation of Government Employees declined comment. Bobby Kogan, a former OMB official now with the Center for American Progress, said the plan amounted to extortion. “It’s an act of self-harm. The administration is essentially saying, ‘Give us what we want or we’ll hurt the country,’” he said.
