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25m ago

Shutdown Day 2: Trump Weighs Agency Cuts as OMB Freezes Billions and Layoffs Loom

The funding lapse follows a dispute over extending ACA subsidies versus retaining Medicaid cuts.

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The sky begins to brighten just before sunrise behind the U.S. Capitol on the second day of a federal government shutdown in Washington, D.C. on Oct. 2, 2025.
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Overview

  • Roughly 750,000 federal employees are furloughed as essential services continue and key data releases pause, including the September jobs report.
  • President Trump said he would meet OMB Director Russ Vought to identify “Democrat Agencies” for cuts, and the White House signaled layoffs could number in the thousands.
  • OMB has put about $18 billion for New York transit projects and roughly $8 billion for climate initiatives in Democratic-led states on hold.
  • Federal unions sued to block permanent reductions in force during the shutdown, and legal analysts say such firings could be unlawful and tied up in court.
  • Republicans push a short-term funding bill without policy changes, Democrats seek to extend ACA subsidies and reverse Medicaid cuts, and the Senate plans to resume votes Friday after a pause for Yom Kippur.