Trump Layoff Threat Raises Economic, Political Stakes of Shutdown

Representative Debbie Wasserman Schultz of Florida said the Trump administration is using "intimidation tactics" to avoid negotiating on a short-term spending plan.

A fresh threat from President Donald Trump’s budget office of mass firings of federal workers if the government shuts down Oct. 1 incensed Democratic leaders and ramped up the political and economic stakes if lawmakers and the White House can’t reach a deal.

A memo sent Wednesday night from the White House Office of Management and Budget directs agencies to plan to permanently lay off federal workers in programs that do not align with Trump’s priorities if the deadline to pass government funding lapses.

Democratic leaders said they wouldn’t back down in the face of the administration’s hardball tactic and it swiftly stoked partisan tensions in the capital. The threat also worsened the potential disruption to the economy with an already weakening labor market since a shutdown now could trigger permanent dismissals of government workers instead of temporary furloughs.

Democratic Senator Chris Van Hollen of Maryland, whose state is home to many federal workers, denounced Trump for “mafia-style blackmail, with his threats ultimately harming the American people.”

Republican congressional leaders were largely quiet on the mass firing threat but Senator Bernie Moreno of Ohio said he’d back permanent layoffs in a prolonged government shutdown. At the White House, Trump pinned the blame on Democrats for demanding that health care priorities be addressed in any spending package.

“This is political by the Democrats. They asked us to do something that’s totally unreasonable,” Trump said.

The threat of mass firings came after Trump scrapped plans to meet with Senate Minority Leader Chuck Schumer and House Minority Leader Hakeem Jeffries, both of whom said they won’t be intimidated.

“These unnecessary firings will either be overturned in court or the administration will end up hiring the workers back,” Schumer said in a statement. Senate Democrats last week blocked a short-term Republican spending bill and demanded negotiations to extend expiring health care subsidies and avert a surge in Obamacare insurance premiums.

Yet Schumer himself publicly worried in March that the Trump administration would seek to use a shutdown to eviscerate agencies, suggesting that court challenges could roll back some of Trump’s unilateral spending cuts if the government stayed open. Senate Democrats provided key votes to advance a Republican spending bill then, but Schumer has changed tactics now after a backlash from the party’s progressive base.

Typically, many federal workers are temporarily sent home during a shutdown and receive back pay once it ends. Workers deemed essential for functions like national security work without pay until the shutdown ends.

The OMB memo, however, makes clear the administration would instead use a shutdown to gut programs it does not support. That could lead to large numbers of federal workers losing their jobs. Even if courts ultimately reverse the firings, those workers could face a long period without pay.

Newly unemployed federal workers would face a tough hiring environment. Job growth has slowed sharply in recent months, and in the Washington area, earlier efforts to shrink government spending have made it particularly difficult for many workers to find job opportunities that match their skills.

The unemployment rate in Virginia, where many federal workers and contractors live, has climbed nearly every month this year. The jobless rate has also risen in both Washington and Maryland.

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