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OMB Uses Shutdown to Freeze Projects, Triggering GOP Rebukes and Lawsuits

Republican unease intensifies following union lawsuits over OMB layoff threats.

Overview

  • A federal shutdown began after Congress failed to pass a stopgap funding bill by the Sept. 30 deadline.
  • OMB Director Russ Vought paused $18 billion in New York infrastructure projects and froze $8 billion in clean-energy funding across 16 mostly Democratic-led states.
  • On a private House GOP call, Vought said federal layoffs could begin within days, prompting unions to sue over the threats.
  • Republican senators, including Susan Collins and Kevin Cramer, criticized the approach as politically risky, while Sen. Mike Lee claimed the strategy is deliberate.
  • The administration says national parks and core benefits like Social Security, VA, Medicare and Medicaid will continue, and New York officials are expected to pursue litigation over halted projects.