Trump’s looming shutdown: Mass layoffs, fewer regulations and military deployments

Under the Trump administration’s plans for a government shutdown, the Labor Department would cut off most activities - then fire thousands of employees. National parks would close, and their staffs could face layoffs. Phone help lines at the Internal Revenue Service would go unstaffed, perhaps permanently.

National Guard deployments to major cities - DC, Memphis and Portland - would continue. Immigration raids and deportation activities would be unaffected, though officers would work unpaid.

If Congress fails to fund the government next week, the White House is preparing for a shutdown that would reflect the purest version of US President Donald Trump’s vision for the Federal Government, guided by White House budget director Russell Vought, an architect of the controversial Project 2025 playbook for Trump’s second term.

Federal funds expire when the fiscal year ends Tuesday night, and Congress appears deadlocked over a stopgap measure that would keep agencies online for seven weeks while long-term negotiations continue.

Under the Vought plan, the only agencies that would remain operating apace are those that received money in Trump’s One Big Beautiful Bill, the $4.1 trillion tax and immigration package that Congress passed in July. The Defence and Homeland Security departments were the main beneficiaries.

The result, both during and potentially after a shutdown, could be a federal government dramatically reoriented to defence, immigration and law enforcement - and not much else.

“Trump is pretty clear about this and Russ Vought has been clear for his entire career,” said Newt Gingrich, the former House speaker and periodic Trump adviser.

“They want a smaller government. They would like to get back to a balanced budget. … They think that many government programs are inefficient or actually destructive, and they are prepared to aggressively pursue every opportunity that the left gives them to reshape the government.”

Traditionally in government shutdowns, employees considered vital to public safety and protecting government property continue to work unpaid, and those who are not are furloughed until Congress approves new agency funding.

But Mr Vought earlier this week told agencies to prepare for mass firings if a shutdown takes hold, and even after that to “retain the minimal number of employees necessary.”

Representatives from the White House and the Office of Management and Budget did not respond to requests for comment.

Many Republicans, including OMB officials, say the cuts are avoidable. The GOP-controlled House passed a funding patch free of partisan policy riders earlier in September. Republicans hold a majority in the Senate, but need Democratic votes to head off a filibuster; Democrats in the upper chamber say they won’t consider a federal financing bill that does not include renewed subsidies for health insurance programs.

“We remain hopeful that Democrats in Congress will not trigger a shutdown,” OMB wrote to agencies this week, “and the steps outlined above (layoffs) will not be necessary.”

But Mr Trump’s budget, released in May, calls for substantial cuts along the same lines. The White House asked Congress to dock the annual appropriation for the State Department by nearly 84 percent, the Department of Housing and Urban Development by more than 43 percent, and the Labor Department by roughly 35 percent.

The White House asked for a 65-percent increase for the Department of Homeland Security. The GOP’s One Big Beautiful Bill included more than $160 billion for immigration restrictions, largely for DHS, though that funding is spread over several years.

Mr Trump’s annual budget also set specific desired staffing levels for each federal agency. It called for a 5-percent staffing cut across the federal government for the 2026 fiscal year, which begins Oct. 1, compared with the final fiscal year of the Biden administration.

That would eliminate more than 114,000 jobs, while adding several thousand for immigration enforcement and border security. Five agencies - responsible for helping homeless Americans, administering foreign aid, investigating chemical safety incidents, protecting consumers from unsafe products and more - would have no staff under Trump’s May budget, and 14 other agencies would lose at least a third of their employees.

Congress has not approved that framework, nor any annual financing bills, giving Mr Vought and the White House broad latitude to shape the federal government’s operations if funding lapses.

In a shutdown, agencies that interact directly with individuals and provide government services would largely suspend operations or face budget shortfalls.

The anti-hunger program for women, infants and children, known as WIC, generally keeps some contingency funds on hand, but those can run out after a number of weeks. Federal housing subsidy programs could face similar funding crunches.

The Small Business Administration would largely halt issuing new loans or providing support for existing loans. Agencies that review permits for everything from public demonstrations to transportation projects would be shuttered.

Programs that do not rely on annual appropriations are unaffected in a shutdown. Those include benefits and staff for Social Security, Medicare and Medicaid.

Those social safety net programs are the main driver of the United States’ $37.4 trillion of debt, not the federal workforce or agency spending.

The US spent $6.8 trillion in the last completed fiscal year; $4.1 trillion of that amount was tied to benefit programs, not the individual agencies that Congress funds each year.

Of that agency spending, the Defence Department - with Trump and the GOP’s budget bill supercharged with $168 billion in additional resources - receives more than half the funding.

Some Republicans have for years hoped to leverage shutdowns to winnow the government workforce. Federal personnel officials classify employees without jobs in public safety or national security as “nonessential” during shutdowns. Those workers are furloughed, but entitled to back pay when Congress approves fresh funding. “Essential” employees - including military service members, transportation security screeners and law enforcement officers - work unpaid.

“If we’re running a big budget deficit and we can’t pay our bills and we have all these nonessential workers, then let’s not have all of them,” said Stephen Moore, a conservative economist and informal Trump policy adviser.

“It makes little sense to furlough many and then pay everybody for not being there. Why would you do that to the taxpayers? What you do is say, ‘What are the jobs that we don’t want?’” said Grover Norquist, an anti-tax crusader and conservative political operative. “And this is a political decision. The president got elected to do this stuff in the executive branch.”

Mr Vought’s layoff threat follows what the US DOGE Service attempted in the early months of Mr Trump’s second term. Tech entrepreneurs Elon Musk and Vivek Ramaswamy declared in a November op-ed in the Wall Street Journal that their organisation’s goals were to implement “regulatory rescissions, administrative reductions and cost savings.”

DOGE accomplished little of that, according to nonpartisan analyses of the group’s activities, and Republican lawmakers privately lament the lost potential - and political headaches - of Musk’s high-visibility “move fast and break things” ethos.

But Mr Vought, people in and around the administration say, has been quietly potent, drawing on four years out of government to surgically plan measures that overhaul the executive branch and Mr Trump’s power. He served in the same role atop the White House budget office in the first Trump administration.

“He’s been thinking about it for years, spent the four years in the wilderness, trying to think through how to dramatically shrink and reshape the federal government,” Mr Gingrich said. “And while for a brief period he was overshadowed by Elon Musk, the fact is that the steady work at OMB has been extraordinary in beginning to move the government away from big government, socialism and centralized bureaucracy, and back towards a much more limited government and a more decentralised government and a government with lot less regulatory power.”

Agencies that Republicans feel have stymied economic growth or trained harsh scrutiny on favoured industries could face the largest cuts in a shutdown, Mr Moore said.

“If you don’t have the regulators, they can’t regulate,” Mr Moore said. “This is a way of culling the herd of the federal regulatory agencies.”

That’s largely consistent with what Vought outlined in Project 2025. “The modern conservative president’s task,” he wrote, “is to limit, control and direct the executive branch on behalf of the American people.”

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