US Economy Will Get Murkier Without Key Data in Shutdown

Blerina Uruci, Chief US Economist at T. Rowe Price, discusses the economic impact of the government shutdown with key economic data on hold.

Republicans honed their shutdown strategy on Wednesday, openly debating how aggressively to use the opportunity to slash federal workers and spending, a hardball tactic that could force Democrats to cave, but carries political risk of backfiring.

Republican House Speaker Mike Johnson on Wednesday said the White House would quickly move to cut the federal bureaucracy. The shutdown gives Republicans an opening to “do some things that we would not otherwise be able to do, because we would never get Democrat votes for them,” Johnson told Fox Business on Wednesday.

The White House budget office “gets to decide now what services are essential, what programs and policies should be continued, and which would not be a priority,” he said.

Vice President JD Vance, however, downplayed those plans saying Republicans don’t want to “lay anybody off” during the federal shutdown and insisted that Democrats would be held responsible for any negative consequences of the government closure.

House Republicans on Wednesday afternoon are set to discuss possible job cuts and spending freezes with Office of Management and Budget Director Russ Vought. Vought’s budget office has called for federal agencies to craft plans for mass firings of government workers beyond traditional furloughs, advancing its goal of slashing the federal bureaucracy.

With federal agencies and departments closed down, President Donald Trump and his allies have pointed fingers at Democrats, with the idea that voters will blame them in the midterm elections next year.

But the discordant approaches to seizing an opportunity to slash government workers or payrolls demonstrates the political risk for the GOP as they attempt to dodge any blowback for their own tactics.

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