Mass Firings Have Begun, Trump Budget Chief Says

So much happening on this fall Friday. Let's get right to it.

Mass Firings Have Begun, Trump Budget Chief Says

On Day 10 of the government shutdown, White House budget director Russell Vought announced that the mass firings of federal workers have begun, dramatically escalating the pain of the political standoff, which is set to continue into next week with no sign of a resolution.

Vought, the man depicted as the Grim Reaper in a video shared last week by President Donald Trump, posted his own grim, four-word message on social media: "The RIFs have begun," he wrote midday, using the abbreviation for "reductions in force."

While past shutdowns have seen federal workers only furloughed, not fired, Vought and Trump had warned that painful cuts would be coming this time, and they indicated that policy and program areas backed by Democrats would be targeted while Trump's priorities would be protected.

"We're only cutting Democrat programs, I hate to tell you, but we are cutting Democrat programs," Trump said at a Cabinet meeting on Thursday. "We will be cutting some very popular Democrat programs that aren't popular with Republicans, frankly."

Trump on Friday evening said that the number of layoffs would be announced in the coming days and reiterated that the layoffs would be "Democrat-oriented," again blaming Democrats for the shutdown. "They started this thing," he said.

Vought provided no further details on Friday, but an Office of Management and Budget spokesperson told Politico that the job cuts "are substantial." Among the departments and agencies where employees reportedly have been laid off: Commerce, Education, Energy, the Environmental Protection Agency, Health and Human Services, Homeland Security, Housing and Urban Development, Interior and Treasury. In all, thousands of workers stand to lose their jobs.

"I think they held off as long as they could," Senate Majority Leader John Thune told reporters.

But Democrats slammed the cuts as unprecedented and entirely unnecessary.

"Let's be clear: Republicans aren't laying off hardworking Americans because they have to. It's because they want to. All to pay for billionaires' tax cuts," House Democratic Whip Katherine Clark said. "This is all the same story. Slashing health care. Taking away people's jobs. Even withholding troops' paychecks. Republicans will continue to make life harder and more expensive for regular people at every turn."

Senate Democratic Leader Chuck Schumer also noted that Trump and Vought don't have to fire anyone but are choosing to do so. "This is deliberate chaos," he said. "Here's what's worse: Republicans would rather see thousands of Americans lose their jobs than sit down and negotiate with Democrats to reopen the government."

Sen. Susan Collins, the top Republican appropriator in the Senate, also came out against the OMB firings, though she also blamed Schumer for the ongoing shutdown. "Arbitrary layoffs result in a lack of sufficient personnel needed to conduct the mission of the agency and to deliver essential programs, and cause harm to families in Maine and throughout our country," she said in a statement.

The American Federation of Government Employees and other unions representing federal workers have already filed suit to stop the mass firings.

"It is disgraceful that the Trump administration has used the government shutdown as an excuse to illegally fire thousands of workers who provide critical services to communities across the country," AFGE National President Everett Kelley said. "These workers show up every day to serve the American people, and for the past nine months have been met with nothing but cruelty and viciousness from President Trump. Every single American citizen should be outraged."

Bipartisanship isn't dead yet: The Senate on Thursday voted down dueling Republican and Democratic government funding bills for a seventh time - but it did manage to break another lengthy impasse and pass its version of the fiscal 2026 National Defense Authorization Act, the massive, must-pass defense policy bill, which sets a $924.7 billion military funding target for the year. The bipartisan 77-20 vote late Thursday clears the way for House and Senate panels to negotiate a final compromise bill.

The Senate then left town until Tuesday, ensuring that the shutdown will stretch into next week at the very least.

Johnson sticks to his strategy: House lawmakers will be gone even longer. Speaker Mike Johnson announced another "district work period" from October 14 to 19, meaning that the House will be out for a fourth straight week. The chamber has not held votes since September 19.

As the shutdown drags on, it appears increasingly certain that military troops won't get their October 15 paychecks. A Democratic attempt at passing a bill by unanimous consent to have active-duty military members paid was blocked by Republicans during the House's brief pro forma session on Friday.

Johnson has insisted that the House has done its part to ensure that troops get paid by passing a seven-week spending bill last month. That bill was blocked in the Senate, and Johnson this week nixed the idea of a standalone measure to pay troops. Johnson has also refused to swear in Adelita Grijalva, the Arizona Democrat who won a September 23 special election to become the newest member of the House. Grijalva would be the 218th member of Congress to sign a discharge petition forcing a vote to release the files related to the Jeffrey Epstein case.

What's next: More of the same, it seems. Democratic leaders continue to press for negotiations to extend expiring healthcare subsidies. Republican leaders continue to insist that any such talks can happen only after the government reopens. Senate Majority Leader John Thune reportedly moved this week to prevent further votes on the Democratic plan to fund the government through the end of the month - perhaps another example of the tensions and frustrations seen boiling over in the halls of Congress at several points this week.

A near-term breakthrough to end the shutdown appears improbable if not impossible, especially given that President Trump has yet to deeply engage on the standoff, allowing Thune and Johnson to take the lead on the GOP side while he focuses on the Gaza peace deal and deploys National Guard troops to major U.S. cities. Trump is planning to head to the Middle East on Sunday and told reporters he will "probably be there" when the remaining Israeli hostages are released on Monday or Tuesday.

Trump Declares Massive Tariff Hike on China

President Trump lashed out at China on Friday, saying on social media that he will impose a 100% tariff on Chinese imports starting on November 1 in response to the country's new curbs on the export of rare earths, critical components used in many types of advanced manufacturing.

In addition to the tariff, which will be applied on top of existing import levies, the U.S. will impose export controls on all "critical software."

Saying "very strange things are happening in China," Trump criticized the new restrictions on exports of the materials that China announced earlier this week, claiming they would "clog" global markets, to the detriment of every country in the world. Among other things, the new rules require companies to obtain a special export license from China if any of the goods they send out of the country contain more than 0.1% of rare earths as measured by value.

In response to what he referred to as an act of "great Trade hostility," Trump also hinted that he may skip a meeting with China's leader scheduled in two weeks. "I was to meet President Xi in two weeks, at APEC, in South Korea, but now there seems to be no reason to do so," Trump said, referring to the Asia-Pacific Economic Cooperation summit that will take place at the end of October.

Trump added that China's actions were "especially inappropriate" at a time when he had just brought peace to the Middle East "after three thousand years of bedlam and fighting."

Tensions rising: In a replay of the time in April when Trump announced his "Liberation Day" tariffs on trading partners around the world, investors sent stocks sharply lower in response to Trump's bellicose threats and the prospect of an intensifying trade war. The Dow Jones Industrial Average fell 878 points, or 1.9%, while the S&P 500 fell 182 points, or 2.7%. Treasury yields fell, too, with the rate on the U.S. 10-year dropping to 4.06%.

Jay Hatfield, chief executive at Infrastructure Capital Advisors, told The Wall Street Journal that Trump's threats introduce a new note of volatility into the markets. "It's definitely the biggest uncertainty we've had since the tariff tantrum," he said.

Another group that is sure to be disappointed by Friday's turn of events: American farmers, who lost one of their biggest buyers earlier this year when China stopped by soybeans in response to Trump's trade hostilities.

Caleb Ragland, a Kentuckian who leads the American Soybean Association, said his organization is "extremely disappointed" that the meeting between Trump and Xi might be canceled. "Trade wars are harmful to everyone," he told The New York Times, "and these latest developments are deeply disappointing at a moment when soybean farmers are facing an ever-growing financial crisis."

A programming note: Like the Senate, we'll be back on Tuesday, barring any major developments in the shutdown. Send your feedback to yrosenberg@thefiscaltimes.com.

Fiscal News Roundup

• Firings of Federal Workers Begin as White House Seeks to Pressure Democrats in Government Shutdown – Associated Press
• Collins Knocks Vought Over Firing of Federal Workers – Politico
• "This Is a Disaster": Congress Erupts at Trump's Shutdown Mass Firings – Axios
• Mike Johnson Sticks to No-Show Shutdown Strategy as Resistance Mounts – Politico
• Thune Accuses Schumer of Being 'Checked out' in Search for Shutdown Deal – The Hill
• DNC Launches Ad Campaign on Health Insurance Costs as Shutdown Fight Drags On – Roll Call
• Federal Workers Share Their Fears as Government Shutdown Grinds On – CBS News
• Shut Down but Not Silenced: Federal Workers Find Their Voice – NPR
• Republicans, Trump, Democrats Share Shutdown Blame: Survey – The Hill
• Federal Government Recalls Workers to Produce Key Inflation Report – Wall Street Journal
• Trump Announces 130% Tariffs on China. The Global Trade War Just Came Roaring Back – CNN
• Senate Passes Bipartisan $925 Billion Defense Policy Bill – New York Times
• 22 States Are in a Recession or on the Brink: Moody's – The Hill
• Trump's Fed Chair Candidates List Narrowed Down to Five by Bessent After Interviews, Sources Say – CNBC
• Trump Called Digital Equity Act 'Racist.' Now Internet Money for Rural Americans Is Gone – KFF Health News

Views and Analysis

• The Fiscal Gambit at the Center of the Shutdown – Andrew Duehren, New York Times
• Democratic Alarm Over an Unbound Trump Fuels Shutdown Standoff – Carl Hulse, New York Times
• 'Democrats Fumbled This': 3 Writers Assess Where We Are With the Shutdown – Frank Bruni, Kristen Soltis Anderson and Nate Silver, New York Times
• Democrats' Government Shutdown Is the Ultimate Display of Hypocrisy – Doug Collins, The Hill
• Pfizer's Deal on Drug Prices Gets Closer to the Right Idea – Bloomberg Editorial Board
• The Latest Beltway Deficit: $1.8 Trillion – Wall Street Journal Editorial Board
• More Sneak Attacks on Social Security – Robert Kuttner, American Prospect
• Economists Were Wrong About Tariffs. They Need to Figure Out Why – Matthew Lynn, Washington Post
• The Tom Homan Affair Has More Red Flags Than a May Day Parade – Mark Lee Greenblatt, New York Times