US Budget Chiefs Demand Layoff Plans Pre-Shutdown

reBy Staff, Agencies

The US Office of Management and Budget [OMB] has instructed federal agencies to draft plans for potential mass firings of US federal workers in the event of a government shutdown next week.

In a memo released Wednesday night, OMB said agencies should prepare for a possible reduction in force affecting programs that would lose funding, are not otherwise financed, and are “not consistent with the President’s priorities.”

This marks a significant departure from previous shutdown procedures, where furloughed workers were typically reinstated once funding was restored.

Unlike furloughs, a reduction in force brings permanent layoffs, deepening the strain on federal workers already hit by Trump administration cuts and efficiency drives.

According to the memo, first reported by Politico, even after a shutdown ends, agencies would be expected to revise their plans “as needed to retain the minimal number of employees necessary to carry out statutory functions.”

The warning significantly raises the stakes ahead of a looming budget impasse and puts added pressure on Senate Minority Leader Chuck Schumer and House Minority Leader Hakeem Jeffries.

Both leaders firmly oppose Trump and Republicans' clean funding bill extending government operations for seven weeks, insisting on urgent healthcare reforms in return.

Neither Democratic leader showed signs of backing down following the release of the memo.

“We will not be intimidated by your threat to engage in mass firings,” Jeffries posted on X. He also referred to OMB Director Russ Vought as a “malignant political hack.”

Schumer described the directive as an “attempt at intimidation,” predicting the layoffs would either be reversed in court or force the administration to rehire affected employees.

The OMB confirmed it held its first shutdown planning call with federal agencies this week but has yet to update contingency plans online, which detail which government functions continue or stop during a funding lapse.

The memo blames Democrats for the possible shutdown, citing their refusal to back the GOP funding bill over demands to extend health insurance subsidies and reverse Medicaid cuts from the Republican tax and spending plan.

The document emphasized that the law passed under the Trump administration provides “ample resources to ensure that many core Trump Administration priorities will continue uninterrupted.”

OMB said all agencies were initially asked to submit shutdown plans by August 1. While many have complied, “OMB has received many, but not all, of your submissions,” the memo noted. “Please send us your updated lapse plans ASAP.”

As the deadline nears, rising political tensions in the US over the budget impasse threaten permanent federal job losses, potentially reshaping the government’s political and operational landscape for months.