By Harshit | September 25, 2025 | Washington, D.C. | 6:15 AM EDT
The White House budget office has instructed federal agencies to prepare sweeping layoff plans in the event of a government shutdown, signaling an unprecedented approach to a potential lapse in funding. The directive, outlined in a memo from the Office of Management and Budget (OMB) and obtained by CNN, calls on agencies to target programs that are not legally required to continue operations and that lack alternative funding streams.
A sharp break from past shutdowns
In previous shutdowns, most federal workers were either furloughed temporarily or deemed essential and asked to work without pay until funding was restored. The new OMB memo marks a departure from that practice, directing agencies to identify non-essential programs for permanent reductions in force.
The memo explicitly states that jobs considered “not consistent” with President Donald Trump’s priorities should be targeted for elimination. “We remain hopeful that Democrats in Congress will not trigger a shutdown and the steps outlined above will not be necessary,” the OMB wrote, while making clear that agencies must be ready to act if lawmakers fail to reach an agreement before the September 30 deadline.
Rising political tensions
The move comes amid a tense standoff between the White House and congressional Democrats over government funding. Democrats have demanded a series of concessions, including an extension of enhanced subsidies under the Affordable Care Act, which are set to expire at the end of the year.
The Trump administration has rejected those demands, with the president earlier this week canceling a scheduled meeting with Democratic leaders. The OMB memo doubles down on that position, labeling Democrats’ demands “insane” and insisting the administration will only accept a “clean” extension that preserves its spending priorities.
Reaction from Capitol Hill
Democrats swiftly condemned the directive, framing it as an attempt to intimidate both lawmakers and federal workers.
“Donald Trump has been firing federal workers since day one — not to govern, but to scare,” Senate Minority Leader Chuck Schumer said in a statement Wednesday evening. “This is nothing new and has nothing to do with funding the government. These unnecessary firings will either be overturned in court or the administration will end up hiring the workers back, just like they did as recently as today.”
An OMB spokesperson declined to comment on the memo, while Politico was the first to report its details.
Impact on federal workforce
If enacted, the plan could lead to some of the largest government layoffs in decades, fundamentally reshaping the federal workforce. The directive echoes Trump’s February executive order that directed agencies to design large-scale reduction-in-force strategies. That effort yielded mixed results, with some agencies cutting significant portions of staff, while others reversed layoffs or even recalled employees after operations were disrupted.
This new shutdown contingency, however, raises the stakes by tying job eliminations directly to a budget impasse, amplifying the uncertainty for hundreds of thousands of federal workers.
What’s at risk
According to the OMB memo, programs most vulnerable to cuts are those that:
Rely solely on congressional appropriations set to expire on September 30.
Do not have alternative revenue or funding mechanisms.
Are considered outside the administration’s “core priorities.”
Essential services — such as national security, public safety, and certain health programs — are expected to remain intact. But a wide range of other services, from regulatory oversight to administrative operations, could face abrupt and lasting staff losses.
Broader implications
The threat of mass firings escalates the political and economic consequences of a potential shutdown. For workers, it means the difference between temporary furloughs and permanent job loss. For agencies, it introduces operational uncertainty and potential long-term gaps in expertise and capacity.
For lawmakers, the memo adds pressure to negotiations in the final days before the funding deadline. A prolonged impasse could test the resilience of the government workforce and heighten partisan clashes heading into the fall.
What’s next
Unless Congress passes a stopgap measure or a broader funding deal by September 30, agencies will be required to implement their shutdown plans. Under OMB’s latest directive, those plans would not simply idle employees but could permanently reshape the federal government.
The memo signals the Trump administration’s willingness to use the looming shutdown not only as a bargaining chip in its clash with Democrats but also as an opportunity to advance its long-standing goal of shrinking the federal workforce.
Negotiations on Capitol Hill remain fluid, with Democrats holding firm on health care subsidies and Republicans pressing for a clean extension. The coming week will determine whether the mass layoffs outlined in the OMB memo become reality or remain a threat in a deepening budget showdown.
