White House Warns of Federal Layoffs as Shutdown Stalemate Deepens

Signage indicates the closure of the National Gallery of Art during the fifth day of a partial government shutdown in Washington, D.C., U.S., October 5, 2025

The White House has signaled that mass layoffs of federal workers could begin if negotiations with congressional Democrats to end the ongoing partial government shutdown fail to make progress.

White House National Economic Council Director Kevin Hassett said on Sunday that President Donald Trump is prepared to act if talks remain “absolutely going nowhere,” though officials still hope a deal can be reached to avoid job losses. The shutdown, now in its fifth day, began on October 1 after Senate Democrats rejected a short-term funding measure.

President Trump told reporters that layoffs were already “taking place right now,” while placing blame on Democrats for the impasse. Meanwhile, Senate Democratic leader Chuck Schumer insisted that only renewed talks between Trump and congressional leaders could resolve the standoff.

At the center of the dispute are Democratic demands for a permanent extension of enhanced health insurance tax credits under the Affordable Care Act, along with assurances that the White House will not unilaterally cut spending agreed to in any deal. Senate Republicans, led by Majority Leader John Thune, have said they are open to discussions but insist the government must first be reopened.

The Senate is expected to vote again on competing funding bills, though neither is likely to secure the 60 votes needed to advance. With nearly 750,000 federal employees facing furloughs and billions in economic costs looming, the pressure to break the deadlock is mounting.