White House Warns Of Federal Layoffs If Government Shutdown Talks Fail

White House National Economic Council Director Kevin Hassett has warned that layoffs of federal employees could begin if President Donald Trump concludes that congressional negotiations to end the ongoing government shutdown “are absolutely going nowhere.”

Speaking on CNN’s State of the Union, Hassett said, “Everybody’s still hopeful that when we get a fresh start at the beginning of the week, we can get the Democrats to see that it’s just common sense to avoid layoffs like that.”

The warning comes as the shutdown enters its fifth day.

According to NBC News, Democrats are holding firm on their healthcare demands, seeking a permanent extension of enhanced premium tax credits as part of any government funding deal. Republicans, however, insist that such discussions should take place in December, not during shutdown negotiations, heightening the deadlock.

On Friday, the Senate once again failed to pass two separate funding bills that could have reopened the government. The Republican-backed bill would have funded operations through late November, while the Democrats’ proposal included additional healthcare funding. Both measures had previously failed multiple times.

The Trump administration has repeatedly cautioned that large-scale layoffs would be “imminent” during the shutdown. Trump previously described the situation as an “unprecedented opportunity” to reduce the size of federal agencies, though no such actions have yet been taken.

Hassett noted that Trump and Office of Management and Budget Director Russ Vought are preparing contingency plans should the situation worsen, while still hoping layoffs can be avoided.

“We think there’s a chance the Democrats will be reasonable once they return on Monday,” Hassett said. “And if they are, then there’s no reason for those layoffs.”