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3w ago

Shutdown Enters Day Two as White House Freezes $26 Billion and Warns of Layoffs

Democratic demands to extend ACA subsidies have stalled a funding deal.

Tourist crowd around a window to view the Liberty Bell with Independence Hall in the background in Philadelphia, Wednesday, Oct. 1, 2025. (AP Photo/Matt Rourke)
The U.S. government entered its second day of shutdown as White House Press Secretary Karoline Leavitt warned that layoffs could reach into the thousands.
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Federal union workers and supporters protest the firings of members of the federal workforce at the Philip Burton Federal Building on Labor Day in San Francisco on Sept. 1, 2025. 

Overview

  • The Bureau of Labor Statistics will not release the September jobs report on Friday, delaying data businesses and Federal Reserve officials use to gauge the economy.
  • The Congressional Budget Office estimates about 750,000 federal employees could be furloughed with roughly $400 million in daily lost compensation.
  • OMB Director Russ Vought froze about $26 billion in previously approved funds, including $18 billion for New York transit and $8 billion for green-energy programs in 16 Democratic-led states, while directing agencies to prepare layoff plans that federal unions are challenging in court.
  • The White House is signaling imminent, potentially permanent workforce cuts and continues to blame Democrats for the shutdown, characterizing their position as aid for undocumented immigrants, a claim contradicted by eligibility rules for ACA subsidies and Medicaid.
  • Competing Senate funding bills failed to clear the 60‑vote threshold, informal bipartisan talks have begun on health-care provisions, and with the House out until Oct. 7 another Senate vote is expected Friday as Democrats cite KFF projections of sharp premium spikes without extended ACA tax credits.