By Manisha Sahu, America News World
25 September 2025
The White House has instructed federal agencies to prepare for possible mass layoffs as the U.S. faces a looming government shutdown next week, raising the stakes in an already tense budget standoff between the Republican-controlled Senate and Democrats in Congress.
According to a memo obtained by CBS News, the Office of Management and Budget (OMB) told agencies late Wednesday to finalize contingency plans and consider issuing reduction-in-force (RIF) notices—the federal government’s term for permanent layoffs. Unlike furloughs, which temporarily sideline workers without pay until a shutdown ends, RIFs would mean permanent job losses for thousands of federal employees.
The directive comes as lawmakers face a September 30 deadline to approve a new funding package before the government’s fiscal year ends. Without a deal, the government will shut down on October 1, forcing widespread disruption across federal operations.
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The OMB memo specifically instructed agencies to identify employees in programs, projects, or activities funded by discretionary appropriations that will expire on October 1, or those without alternative sources of funding. Additionally, the guidance went further than typical shutdown planning by suggesting layoffs could also apply to programs “not consistent with the President’s priorities.”
The memo noted:
“Programs that did not benefit from an infusion of mandatory appropriations will bear the brunt of a shutdown, and we must continue our planning efforts in the event Democrats decide to shut down the government.”
Still, several major federal services would remain unaffected. Statutory programs such as Social Security, Medicare, veterans’ benefits, military operations, law enforcement, immigration enforcement, customs, and air traffic control will continue even in the event of a shutdown, officials confirmed.
While furloughs during shutdowns are not uncommon, permanent layoffs are extremely rare. Traditionally, furloughed employees are repaid once a shutdown ends, restoring normal operations with minimal long-term workforce disruption. Considering RIF notices marks a sharp escalation.
Former OMB official Bobby Kogan, who served under the Biden administration, condemned the move as reckless:
“The mass firings would be an action of enormous self-harm inflicted on the nation, needlessly ridding the country of talent and expertise. It’s also extortive—‘Give us what we want in a funding fight, or we’ll hurt the country.’
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The memo has triggered immediate backlash from Democratic leaders, who see it as a political intimidation tactic by President Trump.
Senate Minority Leader Chuck Schumer (D-NY) labeled the directive “an attempt at intimidation.”
“Donald Trump has been firing federal workers since day one—not to govern, but to scare. This is nothing new and has nothing to do with funding the government,” Schumer said, adding that any laid-off employees would likely be rehired later.
House Minority Leader Hakeem Jeffries (D-NY) was even more blunt, writing on X (formerly Twitter):
“We will not be intimidated by your threat to engage in mass firings.
The government shutdown threat stems from a partisan stalemate over federal spending priorities.
A Republican-backed short-term continuing resolution (CR) passed the House earlier this week, but it failed to reach the 60 votes needed to advance in the Senate. With Republicans holding a narrow 53-seat Senate majority, they still require at least seven Democratic votes to overcome a filibuster.
Democrats, however, are demanding concessions in exchange for their support. Their priorities include:
Reversing this year’s cuts to Medicaid.
Extending tax credits for health insurance coverage.
Maintaining funding levels for specific social programs.
President Trump, who has insisted on a “clean CR” with no added Democratic demands, abruptly canceled a planned meeting with Democratic leaders on Tuesday.
“I have decided that no meeting with their Congressional Leaders could possibly be productive,” Trump wrote on Truth Social, dismissing Democrats’ proposals as “unserious and ridiculous.”
If Congress fails to pass a spending bill by midnight September 30, the federal government will shut down. Essential workers such as TSA agents, border patrol officers, and military personnel will continue working without pay, while hundreds of thousands of others could face furloughs or layoffs.
The White House insists it remains hopeful a shutdown can still be avoided. “The President supports enactment of a clean CR to ensure no discretionary spending lapse after September 30,” the OMB memo concluded, urging Democrats to cooperate.
But with partisan rhetoric intensifying and negotiations stalled, the possibility of a shutdown—and the unprecedented mass layoffs it may bring—appears more likely than ever.
The United States has experienced 21 government shutdowns since 1976, though most were short-lived. The longest shutdown lasted 35 days between December 2018 and January 2019, under the Trump administration, and furloughed about 800,000 workers. However, even then, permanent RIF notices were not considered.
Should the OMB’s current directive move forward, it would mark the first time in modern history that the federal government not only furloughed workers but also pursued permanent layoffs during a budget impass.
With just days left before the deadline, the budget crisis is shaping up to be one of the most consequential fiscal showdowns in years. The fate of millions of federal employees—and the stability of essential government services—hangs in the balance.
Whether the White House’s memo proves to be a hardball negotiating tactic or a genuine step toward mass layoffs, one thing is certain: if no compromise is reached by Tuesday night, the U.S. will enter a new shutdown with consequences that could reverberate far beyond Washington.
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