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1h 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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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.