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The Trump administration is preparing for potential mass layoffs of federal employees as the partial government shutdown entered its fifth day, according to White House officials. National Economic Council Director Kevin Hassett told CNN’s State of the Union that President Donald Trump may order layoffs if negotiations with congressional Democrats “go absolutely nowhere.”
Hassett said Trump and Acting Budget Director Russell Vought are “lining things up” for possible action, though they hope to avoid layoffs. Later that day, Trump told reporters layoffs were already “taking place right now,” signaling escalating pressure on Congress to reach a deal.
The shutdown, which began October 1 at the start of the 2026 fiscal year, followed Senate Democrats’ rejection of a short-term funding bill extending government operations through November 21. So far, talks between the White House and Democratic leaders have stalled. Senate Democratic Leader Chuck Schumer accused Republicans of refusing to negotiate, stating that only renewed talks among top congressional leaders and the president could resolve the impasse.
Democrats are demanding a permanent extension of enhanced Affordable Care Act premium tax credits and assurances that Trump will not cancel future spending agreements. Republican Senate Majority Leader John Thune has urged Democrats to reopen the government first before addressing healthcare concerns.
Trump expressed willingness to “fix” the ACA, calling Obamacare “a disaster for the people,” while maintaining Republicans’ goal of reforming the healthcare system.
The Senate is scheduled to vote Monday on competing short-term funding bills — one backed by the GOP-controlled House and another proposed by Democrats. However, neither is expected to secure the required 60 votes. With Republicans holding a slim 53-47 majority and one member opposed, at least eight Democrats would need to support the House bill to pass it.
Thune summarized the situation bluntly on Fox News: “It’s open up the government or else.”
