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U.S. Government Shutdown Enters Day 2 With Layoff Warnings and Funding Freezes

The administration is withholding discretionary funds, saying agencies could begin terminating workers within days.

Overview

  • Federal operations partially halted after Oct. 1 funding lapsed, with the CBO estimating roughly 750,000 employees furloughed and many essential workers on the job without pay.
  • White House officials warned layoffs could start within days and moved to freeze about $26 billion for projects in Democratic-leaning states, including New York transit and green‑energy funds.
  • Agencies rolled out uneven contingency plans, with late and conflicting staff guidance; unions filed suit to block mass firings, and the Justice Department sought to pause many civil cases.
  • Key benefits like Social Security, Medicare and Medicaid continue for now; SNAP is funded through October and WIC could strain within one to two weeks if the lapse persists, while USPS and most fee‑funded passport and visa services proceed.
  • Parks and museums began closing or curtailing hours, the Smithsonian plans to remain open through Oct. 6, and New York officials said the Statue of Liberty will likely close as governors and mayors announced local mitigation steps.