Government shutdown takes hold with mass layoffs looming and no end in sight

 

WASHINGTON (AP) — The federal government was thrown into a shutdown Wednesday with no easy endgame in sight, as Democrats held firm to their demands to salvage health care subsidies that President Donald Trump and Republican in Congress have dismissed as something to possibly discuss later.

The White House threatened mass layoffs of federal workers, rather than simply the normal furloughs, in a matter of days, seizing the chance to slash government. Blame was being cast on all sides. No new talks were scheduled after the president failed this week to secure a deal with congressional leaders.

“Let’s be honest, if this thing drags on,” warned Vice President JD Vance during a visit to the White House briefing room, “we are going to have to lay people off.”

Roughly 750,000 federal workers were expected to be furloughed, and some fired, by Trump’s Republican administration. Many offices will be shuttered, perhaps permanently, as the president promises to zero in on programs Democrats like. Trump’s deportation agenda is likely to run full speed ahead, while education, environmental and other services sputter. The economic fallout could ripple across the nation.

Democrats believe their health care campaign is what House Leader Hakeem Jeffries called a “moral” issue, but cracks are emerging within the party. A Senate vote on the GOP plan to fund the government without the health subsidies failed, but it drew some Democratic support.

“I certainly pray they will come to their senses,” House Speaker Mike Johnson said, flanked by GOP leaders at the Capitol.

This is the third time Trump has presided over a federal funding lapse and the first since his return to the White House this year. His record underscores the polarizing divide over budget priorities in a political climate that rewards hard-line positions rather than more traditional compromises.

Plenty of blame, but no exit strategy

The Democrats picked this fight, which was unusual for the party that prefers to keep government running, but their voters are eager to challenge the president’s second-term agenda. Democrats are demanding funding for health care subsidies that are expiring for millions of people under the Affordable Care Act, causing the insurance premiums to spike nationwide.

Republicans have have encouraged Trump to steer clear of any talks. At the White House meeting, he gave the congressional leaders “Trump 2028” caps. Afterward, the president posted a cartoonish fake video mocking the Democratic leadership that was widely viewed as unserious and racist.

“President Trump’s behavior has become more erratic and unhinged,” Democratic leaders Jeffries and Sen. Chuck Schumer said in a joint statement. “Instead of negotiating a bipartisan agreement in good faith, he is obsessively posting crazed deepfake videos.”

Asked about the depiction of Jeffries with a mustache and a sombrero, Vance dismissed it as “funny.”

What neither side has devised is an easy off-ramp to prevent what could become a protracted closure. The ramifications are certain to spread beyond the political arena, upending the lives of Americans who rely on the government for benefit payments, work contracts and the many services being thrown into turmoil.

Trump’s Office of Management and Budget, headed by Russ Vought, directed agencies to execute plans not just for furloughs, which are typical during a federal funding lapse, but mass firings of federal workers. Vought told House Republicans during a private conference call Wednesday of layoffs coming in the next couple of days, according to a person granted anonymity to discus it.

Economic fallout expected to ripple nationwide

An economic jolt could be felt in a matter of days. The government is expected Friday to produce its monthly jobs report, which may or may not be delivered.

Wall Street veered toward losses before the opening bell Wednesday as the shutdown went into effect just after midnight, but stocks hit more record highs later in the day.

Across the government, stoppages were getting underway.

What’s staying open and shutting down

The Medicare and Medicaid health care programs are expected to continue, though staffing shortages could mean delays for some services. The Pentagon would still function. And most employees will stay on the job at the Department of Homeland Security.

But Trump has warned that the administration could focus on programs that are important to Democrats, “cutting vast numbers of people out, cutting things that they like, cutting programs that they like.”

As agencies sort out which workers are essential, or not, Smithsonian museums are expected to stay open at least until Monday. A group of former national park superintendents urged the administration to close the parks to visitors, arguing that poorly staffed parks are a danger to the public and put resources at risk.

Health care costs expected to soar

Ahead of Wednesday’s start of the fiscal year, House Republicans had approved a temporary funding bill, over opposition from Democrats, to keep government running into mid-November while broader budget talks continue.

But that bill has failed repeatedly in the Senate, including Wednesday, on a 55-45 vote. It needs 60 votes to advance, which requires cooperation in a chamber where the GOP has a 53-47 majority. A Democratic bill also failed.

Divisions within the Democrats are apparent, as three senators again crossed over to join Republicans. One Republican opposed the GOP plan.

During the roll call, an widening group of senators engaged in an intense conversation, including GOP Sen. Mike Rounds of South Dakota, who has been talking with colleagues about the idea of a one-year extension of the expiring health care subsidies.

“It’s just one thought, and there are other ideas that are out there,” Rounds said afterward.

Senate Majority Leader John Thune, who has said Republicans are happy to discuss the health care issue — but not as part of talks to keep the government open — is working to peel off more Democrats to his side.

The standoff is a political test for Schumer, who has drawn scorn from a restive base of left-flank voters pushing the party to hold firm in its demands for health care funding.

Johnson sent lawmakers home nearly two weeks ago but said they would be back next week.

Trump, during his meeting with the congressional leaders, expressed surprise at the scope of the rising costs of health care, but Democrats left with no path toward talks.

During Trump’s first term, the nation endured its longest-ever shutdown, 35 days, over his demands for funds Congress refused to provide to build his promised U.S.-Mexico border wall.

In 2013, the government shut down for 16 days during the Obama presidency over GOP demands to repeal and replace the Affordable Care Act, also known as Obamacare. Other closures date back decades.

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Associated Press writers Matt Brown, Joey Cappelletti, Aamer Madhani, Will Weissert, Fatima Hussein and other AP reporters nationwide contributed to this report.