White House National Economic Council Director Kevin Hassett has warned that layoffs of federal employees could begin if President Donald Trump determines that congressional negotiations to end the ongoing government shutdown “are absolutely going nowhere.”
Speaking on CNN’s State of the Union, Hassett said, “Everybody’s still hopeful that when we get a fresh start at the beginning of the week, we can get the Democrats to see that it’s just common sense to avoid layoffs like that.”
The warning comes as the government shutdown enters its fifth day, with no sign of progress between the White House and congressional leaders.
According to NBC, Democrats have remained firm on their demands to include a permanent extension of enhanced premium tax credits in any funding bill — a position Republicans have rejected. GOP lawmakers argue that such healthcare discussions should be deferred until December, not tied to the current shutdown negotiations.
On Friday, the Senate once again failed to pass two competing funding measures. The Republican proposal sought to keep the government open through late November, while the Democrats’ version included expanded healthcare provisions. Both had already failed multiple times in the upper chamber last week.
The Trump administration has repeatedly warned that a prolonged shutdown could trigger widespread layoffs across federal agencies. Last week, the President described the impasse as an “unprecedented opportunity” to shrink government size by cutting jobs — though no such action has yet been taken.
Hassett confirmed that Trump and Office of Management and Budget Director Russ Vought are preparing contingency plans in case talks collapse. “They’re lining things up and getting ready to act if they have to,” he said, “but hoping that they don’t.”
Despite the looming threat of job cuts, Hassett expressed cautious optimism that a deal might still be reached soon. “We think the Democrats — there’s a chance they’ll be reasonable once they get back into town on Monday,” he said. “And if they are, then I think there’s no reason for those layoffs.”
