Federal employees across the nation may soon face the harsh reality of losing their jobs if elected officials from both the Republican and Democratic parties are unable to find meaningful common ground in their negotiations to end the ongoing government shutdown, according to one of the administration’s leading economic advisors. Speaking on Sunday, Kevin Hassett, the director of the National Economic Council and a senior figure within the White House, delivered a candid assessment of the economic and political stakes involved. Appearing on CNN’s well-known political program “State of the Union,” Hassett explained that the President’s perception of whether the discussions with congressional leaders are progressing productively will be critical. If the President ultimately concludes that the talks have reached an impasse and no forward movement seems possible, he warned, mass layoffs among federal workers could soon begin as a direct consequence.
The current shutdown began on October 1, triggered by Congress’s failure to reach an agreement on a critical spending package that would extend funding for federal operations beyond the end of the fiscal year on September 30. Despite the Republican Party’s control of both the House of Representatives and the Senate, legislative procedure requires that major funding bills clear a sixty-vote threshold in the upper chamber. This rule means that a number of Democratic senators must be willing to cross party lines and support the measure in order to break the legislative stalemate. Without such cooperation, the federal government remains unable to approve essential spending, freezing vital services and leaving hundreds of thousands of government employees in professional limbo.
At the heart of the dispute lies a profound disagreement over the future of certain expiring tax credits that significantly reduce the cost of health insurance for millions of American citizens. These tax provisions have been central to keeping healthcare coverage within reach for middle- and lower-income families. Democratic lawmakers have pushed to preserve these subsidies, arguing that their expiration would impose undue financial strain on vulnerable households. In addition, they are seeking to repeal the reductions to Medicaid funding implemented by the Trump administration in July, contending that the cuts have already undermined healthcare access for disadvantaged populations and should be restored as part of any final budget agreement.
Prior to the shutdown taking effect, the Office of Management and Budget circulated an internal memorandum to the heads of federal agencies, instructing them to proactively assess the possibility of initiating reduction-in-force measures—essentially, official notices of potential layoffs. The memo advised agency leaders to evaluate staff positions within programs that do not align with the current administration’s strategic priorities, warning that such operations may be among the first to lose funding during a government-wide closure. However, the document did not specify how many employees might ultimately be affected, leaving uncertainty about the scale and scope of potential job losses.
When questioned by journalists regarding the possible magnitude of these layoffs, President Donald Trump offered a brief but telling response, indicating that the administration “may do a lot” if the shutdown persists. His statement, though lacking in precise details, underscored the seriousness of the administration’s stance and suggested that large-scale workforce reductions remain an active consideration should negotiations fail to produce a timely resolution.
In an automated message sent from the White House press office, officials attributed their inability to provide detailed comment in real time to staffing shortages directly caused by the shutdown. The response noted that such challenges could have been entirely avoided had Democratic legislators joined Republicans in supporting what the administration described as a “clean Continuing Resolution” to maintain government funding without additional policy conditions attached.
Meanwhile, as the budget impasse stretched on, nearly one-third of the federal government’s roughly 750,000 employees found themselves officially furloughed. Yet, Business Insider’s Bryan Metzger reported that the Department of Government Efficiency—a relatively small but symbolically notable agency—appeared unaffected, with all forty-five of its staff members continuing their duties uninterrupted despite the broader paralysis affecting other offices.
Nevertheless, even amid the uncertainty, Hassett expressed cautious optimism that the situation might still be resolved before any mass layoffs become unavoidable. During his Sunday interview, he reiterated that administration officials remain hopeful lawmakers can soon come together to forge a compromise acceptable to both parties. He suggested that with the new week’s arrival, political leaders might bring a renewed sense of pragmatism and recognize that avoiding further job losses is simply an exercise in common sense. His remarks reflected a blend of realism and guarded hope—a belief that reasoned collaboration, despite political friction, could yet spare thousands of public servants from economic hardship and preserve a measure of stability in an already strained government workforce.
Sourse: https://www.businessinsider.com/kevin-hassett-government-shutdown-layoffs-federal-workers-2025-10
