White House Initiates Layoffs Amid Ongoing Government Shutdown
The White House has kicked off a series of layoffs, which began on Friday, affecting various departments including the Treasury, as the government shutdown continues.
Termination notices were sent to all employees of the Community Financial Institutions Foundation (CDFI), according to administration officials. This decision aligns with warnings from White House representatives, indicating that significant layoffs and budget reductions would follow unless Democrats returned to the negotiating table and reopened the government.
The CDFI, as detailed in its most recent annual report, employs about 102 full-time workers. This organization aims to enhance economic opportunities for underserved communities by boosting the capacity of community development financial institutions. However, some critics have argued that government agencies have deviated from their core missions and have become overly politicized.
Russ Vought, budget director under President Trump, noted, “RIF has begun,” referring to the reduction in force. The layoff strategy is expected to extend across government departments, although the total number of impacted employees remains uncertain.
By the deadline of October 1, the Office of Management and Budget (OMB) was instructed to create a plan for workforce reduction, targeting programs without current funding that conflict with presidential policies.
Officials indicated that the CDFI Fund was a primary target due to its support of certain racial, gender, and climate-related initiatives, which the current administration views unfavorably.
In March, under a presidential order, functions of several federal agencies, including the CDFI, were limited in an effort to streamline government operations deemed unnecessary. The foundation has made contributions aimed at community support, such as $4.9 million to the Local Initiatives Support Corporation, which has published perspectives critical of racial dynamics in development.
Despite the layoff plans, there’s uncertainty over whether they’ll hold up against potential legal challenges. Various federal labor unions have already filed a lawsuit to prevent mass layoffs during the shutdown.
Everett Kelly, the president of the American Federation of Government Employees, expressed disapproval, stating that it’s unacceptable for the Trump administration to use the shutdown as a basis for terminating thousands of employees vital to community services.
Vought has long aimed to reduce government size and spending since Trump took office for his second term.
The government’s funding expired last Wednesday after Democrats rejected a bipartisan spending bill intended to prevent the shutdown. As discussions collapsed, Senate Majority Leader John Thune repeatedly brought the same proposal to the floor, only to face further delays from Senate Democrats.
Democrats propose $1.5 trillion in new spending, focusing on various priorities while Republicans argue that their counter-offer lacks urgency. In a cabinet meeting, President Trump emphasized their intention to cut programs perceived to favor Democratic policies.
Amid the budget discussions, the government has already halted $7 billion in funding for energy projects initiated during the Biden administration, affecting infrastructure developments across major cities.
During the shutdown, House Speaker Mike Johnson welcomed the government’s attempts to downsize, advocating that this moment presents a rare opportunity to reassess and adjust federal operations.
“I’ve always felt and expressed that the federal government is too large, inefficient, and fails to deliver effectively,” Johnson remarked. He believed the shutdown could accelerate efforts to reduce the government’s size.
As news of these significant layoffs spread on social media, reactions varied widely, with figures like Schumer indicating that “this is intentional confusion.”
