The Trump administration has escalated its actions during the federal shutdown by blaming Democrats for potential layoffs and withholding funding for infrastructure projects in “blue” states. Government funding has run out, and Congress is deadlocked over extending spending, with both sides blaming each other. Both Republican and Democratic funding bridge bills have stalled, and Congress adjourned Thursday for Yom Kippur—further prolonging the impasse.
From the White House, Vice President J.D. Vance said the government “will have to lay off some people” if the shutdown continues to prioritize essential services—although the size of the federal bureaucracy is not related to the state of the nation’s coffers when spending authorizations expire. Budget Director Russell Vought signaled new layoffs within days and warned that the WIC food program could run out of funds next week. At the same time, the White House is characterizing the shutdown as an opportunity to overhaul the bureaucracy and centralize executive authority, including through the practice of “impoundment,” which has previously sparked legal disputes.
Political pressure is also evident on sectoral policies. The government withheld approximately $18 billion in federal funding for the Second Avenue Subway in New York and the Hudson Tunnel in New Jersey under review, and also cancelled an $8 billion green energy project in states with Democratic senators. Several government agency websites carried partisan messages blaming Democrats, raising concerns about Hatch Act violations. On the ground, confusion was widespread: a former State Department employee was mistakenly sent a furlough letter, while FAA staff said their status was unclear beyond the “orderly shutdown” instruction.
While many public functions ceased, vital services—national security, the military, and law enforcement—continued, though some employees were temporarily without pay. The IRS remained open with funds from the Inflation Reduction Act of 2022. Major benefit programs like Social Security, Medicare, Medicaid, and the USPS postal service remained operational. However, many units of the Department of Labor, including the BLS, were closed; national parks were open to outdoor use only, museums and indoor facilities were closed, and the National Zoo was closed to visitors, though animal care was still ongoing. Federal research and some NIH/CDC/EPA activities were also halted. There are faint signs of a compromise: about 20 senators across party lines are informally exploring options to end the impasse—including a compromise on ACA subsidies—but the trust crisis between the Senate and House remains high. Meanwhile, Washington, D.C., is reviving the “DC is Open” campaign to cushion the blow to the local economy. This is the first shutdown since January 2019 and the fourth in Trump’s two terms, with the White House signaling it will use the shutdown to push for major structural changes in the federal government.
Key Points:
Funding is exhausted, bridge bills from both sides have failed, and the impasse continues.
The White House is threatening layoffs and putting $18 billion in rail/tunnel projects on hold; $8 billion in green projects are canceled.
Several agency websites are carrying partisan messages, fueling Hatch Act concerns.
Essential services remain open (often without temporary payroll); many non-essential functions are closed.
The IRS remains open (funded by the 2022 IRA); Social Security/Medicare/Medicaid/USPS remain operational.
National parks are open; museums/closed buildings are closed; federal research is largely halted.
There are cross-party talks but trust is low; DC is pushing the “DC is Open” campaign.
The current shutdown is being used by the administration to push for the consolidation of executive authority.
Source: Bloomberg.com