White House Orders Agencies to Draft Job Cut Plans Ahead of Shutdown

Escalation Beyond Standard Furloughs

The White House Office of Management and Budget (OMB) has instructed federal agencies to prepare plans for permanent job cuts in the event of a government shutdown, marking a sharp break from recent precedent. Traditionally, nonessential employees were furloughed and later reinstated with back pay once funding resumed.

Programmes at Risk

In a memo sent late Wednesday, OMB told agencies to identify programmes where discretionary funding lapses on Oct 1 and no alternative sources exist. According to the directive, such programmes would be “no longer statutorily required,” and agencies must be ready to eliminate associated jobs. The scope of potential cuts remains unclear, as OMB has not released the usual contingency plans.

Economic and Political Fallout

A large-scale dismissal of federal workers could weigh on economic growth, given that around 40% of government employees are typically furloughed during shutdowns. Critics argue the new approach could cause long-term harm. Bobby Kogan, a former OMB official under the Biden administration, called the move “extortive,” warning it needlessly discards talent and expertise.

Budget Standoff Intensifies

The directive comes amid a deadlock in Congress over government funding. Democrats oppose President Donald Trump’s demands to cut Medicaid and block health care subsidies. Planned talks were cancelled after Trump insisted Democrats first drop their conditions.

House Democratic leader Hakeem Jeffries accused the administration of already overstepping federal spending laws and pledged not to bow to “intimidation” tactics. He emphasized that Democrats are seeking limits on presidential powers in any stopgap measure.