US President Donald Trump has threatened to use the first government shutdown since 2019 to push through mass firings and slash social programmes unless Democrats give up their demands for health care funding. “The cruelty is the point,” House Democratic leader Hakeem Jeffries said.
Issued on: 02/10/2025
By: FRANCE 24
Rather than simply furlough employees, as is usually done during any lapse in funds, White House Press Secretary Karoline Leavitt said layoffs were “imminent”. The Office of Management and Budget (OMB) announced it was putting on hold roughly $18 billion in infrastructure funds slated for subway and Hudson Tunnel projects in New York – the hometown of the Democratic leaders of both the House and the US Senate.
Trump has marveled over his budget director.
“He can trim the budget to a level that you couldn’t do any other way,” the president said at the start of the week of OMB Director Russ Vought, who was also a chief architect of the far-right Project 2025 "wish list", which Trump has disavowed but which has seemingly informed many of his policy choices since his return to power.
“So they’re taking a risk by having a shutdown,” Trump said of Democrats during an event at the White House.
750,000 federal workers could be furloughed
The aggressive approach coming from the Trump administration is what certain lawmakers and budget observers feared if Congress, which has the responsibility to pass legislation to fund the government, failed to do its work and relinquished control to the White House.
In a private conference call with House GOP lawmakers Wednesday afternoon, Vought told them of layoffs starting in the next day or two, an extension of the imprudent slashing of government workers and programmes undertaken by the self-proclaimed "Department of Government Efficiency" under Elon Musk at the start of the year.
“These are all things that the Trump administration has been doing since January 20th,” said House Democratic leader Hakeem Jeffries, referring to the president’s first day in office.
“The cruelty is the point.”
With no easy endgame at hand, the stand-off risks dragging into October, when federal workers who remain on the job will begin missing paychecks.
The nonpartisan Congressional Budget Office (CBO) has estimated that roughly 750,000 federal workers would be furloughed on any given day during the shutdown, a loss of $400 million daily in wages.
The economic effects could spill over into the broader economy. Past shutdowns saw “reduced aggregate demand in the private sector for goods and services, pushing down GDP”, the CBO said.
“Stalled federal spending on goods and services led to a loss of private-sector income that further reduced demand for other goods and services in the economy,” it said.
Overall, CBO said there was a “dampening of economic output” but that reversed once people returned to work.
“The longer this goes on, the more pain will be inflicted,” said Republican House Speaker Mike Johnson of Louisiana, “because it is inevitable when the government shuts down”.
Trump and the congressional leaders are not expected to meet again soon. Congress has no action scheduled Thursday in observance of the Jewish holy day of Yom Kippur, with senators due back on Friday.
The House is set to resume session next week.
Healthcare funding at heart of conflict
The Democrats are holding fast to their demands to preserve healthcare funding and refusing to back any budget bill that fails to do so, warning of an untenable rise in prices for millions of Americans nationwide. The Kaiser Family Foundation estimates insurance premiums will more than double for people who buy policies on the Affordable Care Act exchanges, also known as Obamacare.
The Republicans have opened a door to negotiating the healthcare issue, but GOP leaders say it can wait, since the subsidies that help people purchase private insurance don’t expire until year’s end.
“We’re willing to have a conversation about ensuring that Americans continue to have access to health care,” Vice President JD Vance said Wednesday at the White House.
ICE agents still at work
With Congress as a standstill, the Trump administration has taken advantage of new levers to determine how to shape the federal government.
The Trump administration can tap into funds to pay workers at the Defense Department and Homeland Security from what’s commonly called the “One Big Beautiful Bill” that was signed into law this summer, according to CBO.
That would ensure Trump’s immigration enforcement and mass deportation agenda is uninterrupted. But employees who remain on the job at many other agencies will have to wait for government to reopen before they get a paycheck.
Already Vought, from the budget office, has challenged the authority of Congress this year by trying to claw back and rescind funds lawmakers had already approved – for Head Start, clean energy infrastructure projects, overseas aid, and public radio and television.
The Government Accountability Office has issued a series of rare notices of instances where the administration’s actions have violated the law.
But the Supreme Court in a ruling late last week allowed the administration’s so-called “pocket rescission” of nearly $5 billion in foreign aid to stand.
(FRANCE 24 with AP)
US Government In Gridlock: Healthcare Battle Triggers Nationwide Shutdown – Analysis
The US government shut down on October 1, 2025, at 12:01 AM (9:31 AM IST) because Republicans and Democrats could not agree on a funding deal. With no budget approved, most government work has stopped.
What it means?: Federal funding means the money collected from taxes that the government uses to pay salaries, run offices, build infrastructure, and support programs like healthcare, education, and defense. Without approval, the government cannot legally spend this money.
As a result of the shutdown, many government offices close, federal workers may not get paid on time, and public services such as visas, national parks, and research projects either slow down or stop. Only essential services like the military, hospitals, and air traffic control continue to function. This is the first shutdown in seven years.
Both parties blamed each other. Republicans, led by President Donald Trump, said the Democrats were responsible.
According to Indian Express, Senator John Thune said the Democrats’ far-left members pushed for a fight with the President, and their leaders agreed. He added that now the American people will suffer because of it.
The US government has shut down 14 times since 1980, and three times during Trump’s first term (2017–2021). Here’s what you need to know.
To begin with, what does a government shutdown mean?
Every year, before October 1, the US Congress must pass around 12 funding bills that decide how money will be given to different government agencies. After that, the President must approve them for the government to keep running.
The US Congress is America’s law-making body. It has two parts—Senate and House of Representatives—which include both Republicans and Democrats. They make laws, approve budgets, and keep a check on the President’s powers.
These bills are sometimes combined into one big “omnibus” bill to quickly pass them at the last minute.
An “omnibus” bill means a single large bill that combines many smaller funding bills into one. Instead of passing each bill separately, Congress passes them together to save time and avoid delay.
A shutdown happens when Congress fails to approve money before the funding deadline ends.
Based on how much funding is approved and which agencies receive money, the government may fully shut down or only partially shut down.
What caused the current shutdown?
This shutdown happened because the Democrats wanted to extend healthcare subsidies and bring back the Medicaid cuts removed under Trump’s Big, Beautiful Bill.
Medicaid is a government program in the US that provides free or low-cost healthcare to poor and low-income people, including children, pregnant women, elderly, and disabled individuals.
Three months ago, the Republicans passed a bill that gave rich people big tax cuts, spent more money on the military, and cut programs like Medicaid (healthcare for poor people). This bill also planned to send out more immigrants. Because of it, some offices like the Department of Defense and Homeland Security will still get money and keep working, even during the shutdown.
When the Republicans said the government should keep running with the same money currently being used until November 21, it also meant continuing under the same conditions as the earlier bill — including Medicaid cuts, tax breaks for the wealthy, and higher defence spending.
But the Democrats said no. They wanted the money to last only till October, because they planned to ask again later for healthcare benefits and to reduce Trump’s control over funds.
Since the two sides could not agree, the government had to shut down.
How does a shutdown affect people?
For federal employees (people who work for the US government, like park rangers, scientists, or clerks): During a shutdown, all non-essential government work stops until Congress approves funding, except for programs that are paid through other sources like fees.
Non-essential employees example: Workers at national parks or museum staff may be asked to stop working during a shutdown.
Funded through fees example: Passport services may still run because people pay fees for them.
The Antideficiency Act decides how the government works during a shutdown. It allows only essential services to continue, while non-essential work must stop.
Examples of essential work: Air traffic control, border security, water supply, electricity, and hospitals keep running because they are critical for safety and daily life.
Examples of non-essential work: Museums, tourist sites, and national parks may close since they are not urgent for people’s safety.
The Act says government workers cannot work for free or do extra work beyond what the law allows, except in emergencies that involve saving lives or protecting property.
Example: A firefighter or doctor in a government hospital can still work during a shutdown because their job protects human life and property. But a museum guide cannot, since it is not an emergency service.
In the last shutdown (Dec 2018–Jan 2019), about 800,000 government workers were sent home. This time, the CBO (Congressional Budget Office) says around 750,000 workers may be sent home, costing about $400 million (₹3,520 crore) each day in back pay.
The Antideficiency Act allows money for only essential services that protect life and property, and for important officials like the President, White House staff, military on duty, and federal police.
For the public: Programs like Medicare, Medicaid, and Social Security will keep working because their benefit payments are funded permanently and do not need Congress approval every year. However, since Medicaid was cut earlier under the bill, it will continue but at a reduced level.
So, people already getting benefits will keep receiving them, but adding new people may be hard because many workers are on leave during the shutdown.
Civilians may face problems in travel and transport if airport staff or air traffic controllers refuse to work without pay. Also, public attractions and landmarks may close because of staff leave without pay.
On the economy: The effect of a shutdown depends on how long it lasts. The CBO said if it goes on for weeks, some private businesses may never recover the money lost.
Example: A catering company that supplies food to government offices or a travel agency handling official trips may lose income they cannot get back.
The 2018–19 shutdown was the costliest, cutting economic output by $11 billion (₹9.68 lakh crore), and about $3 billion (₹2.64 lakh crore) was never regained by the US economy, said the CBO.
The shutdown will also delay the September jobs report because the Bureau of Labor Statistics will be closed. This report is very important as it shows the health of the US economy. It also helps the Federal Reserve decide on changes to the repo rate.
The repo rate is the interest rate at which the central bank (Federal Reserve) lends money to banks. If the repo rate goes up, loans become costlier for people and businesses. If it goes down, loans become cheaper, which can boost spending and growth.
Officials will have to use other data sources, like information from the 12 regional central banks, to understand the condition of the US job market. This is possible because these banks regularly collect regional employment and business data, which can give a rough picture of the overall economy when national data is delayed.
How this shutdown could be different
This shutdown may be different from earlier ones because of Trump’s Department of Government Efficiency (DOGE), a semi-government agency. The department, created to cut wasteful spending and reduce the size of government, suggested firing federal employees instead of just sending them on unpaid leave.
The Office of Management and Budget told federal agencies in a memo last week to “use this chance to consider permanent job cuts” instead of temporary leave.
The memo said, according to Indian Express, that programs which do not get automatic funding will be hit the hardest during a shutdown. It also told officials to keep planning ahead, in case the Democrats let the shutdown continue.
With both sides digging in, the long-term impact of this shutdown—and the threat of permanent job cuts—leaves the nation in a state of uncertainty.”
Girish Linganna
Girish Linganna is a Defence, Aerospace & Political Analyst based in Bengaluru. He is also Director of ADD Engineering Components, India, Pvt. Ltd, a subsidiary of ADD Engineering GmbH, Germany. You can reach him at: girishlinganna@gmail.com
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