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last mo.

U.S. Shutdown Drags On as Trump Embraces Project 2025 and Expands Targeted Funding Freezes

Layoff plans alongside suspended economic reports raise the stakes of the funding standoff.

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Overview

  • After the Senate failed Friday to reach 60 votes on competing stopgaps, the funding lapse will extend into next week with pay halted for roughly two million federal workers while essential staff continue working.
  • The administration has frozen at least $28 billion for Democratic-led jurisdictions, including $2.1 billion for Chicago transit, with Budget Director Russ Vought citing concerns about race-based contracting.
  • Trump publicly aligned with the Heritage-linked Project 2025 and met with Vought to consider agency cuts, using the shutdown to accelerate plans to shrink the federal workforce and target Democratic-backed initiatives.
  • OMB instructed agencies to prepare for mass layoffs rather than routine furloughs, and Vought told Republicans the firings would begin in the coming days.
  • The BLS and BEA suspended scheduled releases, including the monthly jobs report, complicating market and Federal Reserve assessments, while House GOP leaders said they will stay away from Washington as Democrats push to extend pandemic-era ACA subsidies.