US Government Shutdown Live Updates: White House warns of mass layoffs as shutdown continues into next week

President Donald Trump and other GOP leaders have accused Democrats of demanding free health care for “illegal aliens” in return for their support of a federal funding bill, reported CNN.

“The Democrats want Illegal Aliens, many of them VIOLENT CRIMINALS, to receive FREE Healthcare,” the US president had said in a Truth Social post last week.

Buoyed by expectations of further US interest rate cuts this year and worries over the impact of a US government shutdown, gold continues to remain on track for a seventh straight weekly gain on Friday, reported AP. Spot gold was down 0.3% at $3,844.01 per ounce, as of 0434 GMT, as the dollar firmed. The bullion hit an all-time high of $3,896.49 on Thursday and has increased 2% so far this week.

“Climb in the dollar caused a minor speed bump for the gold price, but the precious metal is still well within shouting distance of the $3,900 level,” said KCM Trade Chief Market Analyst Tim Waterer.

The BBC spoke with an employee at the US Department of Commerce who said that even though the shutdown is causing financial hardship, they want Congress to stay firm. During the shutdown, the Commerce Department is furloughing 34,711 of its 42,984 staff members, nearly 81% of the total workforce. The employee, who asked to remain anonymous but was verified by the BBC, said they are struggling to pay bills and living week to week. They added that they are willing to face these difficulties rather than let Congress give in to pressure and create a plan that harms the American people.

The American football game on Saturday between two US military branches will take place as planned, even though some staff from the teams are on furlough due to the government shutdown.

The football programs for the Navy, Army, and Air Force are run by non-profit organizations, so they are not directly affected by Congress failing to pass a federal budget. The Air Force said it will not livestream home games while the shutdown continues and warned fans to expect fewer and slower updates.

The Senate adjourned on Thursday without holding any votes to observe the Yom Kippur holiday. The chamber will meet again at 11:30 am on Friday, which is 9 pm as per IST. Senators plan to vote on both Republican and Democratic bills to extend government funding, though both bills have failed in previous attempts.

Trump shared a series of videos and memes on Truth Social that seemed to be aimed at mocking congressional Democrats. One video called Office of Management and Budget Director Russell Vought, who is considering federal funding cuts and layoffs, “the reaper.”

“Russ Vought is the reaper / he wields the pen, the funds and the brain,” sings an unnamed person in the video, to the tune of Blue Öyster Cult’s “(Don’t Fear) The Reaper.”

The animated clip shows Vought as a Grim Reaper carrying a scythe, with Vice President JD Vance on drums and a hooded Trump playing a cowbell. The video calls Democrats “babies” and makes fun of lawmakers like House Minority Leader Hakeem Jeffries. CBS News has reached out to Blue Öyster Cult for comment.

Trump also shared a post saying, “All eyes are on Russ Vought today.”

Earlier Thursday, he had shared that he met with Vought to decide which Democrat-led agencies, many of which he called a political scam, should be cut and whether the cuts would be temporary or permanent.

The White House on Thursday warned that thousands of federal workers could lose their jobs if the government shutdown continues, increasing political tensions in Washington. Press Secretary Karoline Leavitt said officials are already preparing for possible layoffs, with the Office of Management and Budget and other departments discussing which areas could be affected, according to Fox News.

Leavitt blamed Democrats for the shutdown, saying the talks would not be happening if they had agreed to keep the government open. She also accused them of “playing politics” over disagreements on health care benefits for undocumented immigrants.

Speaker Mike Johnson has said that Trump has the power to lay off federal workers and hold back funding for ongoing approved projects. Johnson argued that Democrats handed “the keys of the kingdom to the president” by allowing funding to lapse. He explained that when Congress stops providing money and resources run out, it becomes the president’s job to decide how the remaining funds are used.

He added that this power was given to Trump by Democrats in the Senate and added that they “can’t complain” about him using it. Johnson also said the president does not want to avoid his responsibility. The remarks came during a news conference, where Johnson was answering questions from NBC News.

US Treasuries faced delays as the government shutdown entered its second day, holding back economic data and leaving investors without updates on the labor market that could indicate the Federal Reserve’s next move, according to Bloomberg. The report said that in US afternoon trading on October 2, yields had fallen from session highs but remained within two basis points of their previous closing levels.

US President Trump said he plans to meet with Russ Vought, the head of the Office of Management and Budget, to review which programs Vought suggests cutting. On Wednesday, the White House began pausing or canceling billions in funding for projects in Democratic-leaning states, increasing pressure on Democrats.

The FBI Agents Association has warned that if the government shutdown continues, it will limit travel, training, hiring, and other important FBI work. These limits will slow down investigations, delay forensic tests, and make it harder for the FBI to work with state, local, and international law enforcement. FBI agents will still have to work during the shutdown, but they will not be paid.

The Senate was open on Thursday, but no voting took place because of Yom Kippur. Votes are expected to resume Friday on both the Democrat funding bill, which includes health care measures, and the short-term government funding bill. Senator John Thune said he does not expect the Senate to work over the weekend. He added that he might meet with Minority Leader Chuck Schumer, but only if the meeting is serious and focused on resolving the shutdown, not just for show.

House Minority Leader Hakeem Jeffries said that Trump’s threats to fire more federal workers will not make Democrats give up on their demands for healthcare funding.

Jeffries pointed out that layoffs have already been happening since Trump took office, so additional threats are unlikely to change anything. He added that the administration has been firing thousands of federal employees even before the government shutdown, and these are hardworking public servants, many of them veterans. He described the ongoing firings as unfortunate.

Restaurants in the DC area are helping federal workers who are not getting paid as the government shutdown entered its second day, reported BBC. At Pork Barrel BBQ in Alexandria, just across the river from Washington, federal workers can get one free pulled pork sandwich per day if they show a government ID, for as long as the shutdown lasts. Manager Bill Blackburn told BBC that the neighborhood has many federal workers, and this is his way of giving back to the community that supported his restaurant during hard times, like the Covid-19 pandemic. The restaurant also offered free meals during the 2013 and 2018–2019 shutdowns.

Nearby La’Baik, a Mediterranean fast-casual restaurant, is offering furloughed workers a free drink or baklava.

Republican Senate Leader John Thune is stepping away from the White House budget director’s plan, saying he cannot support the idea of permanently laying off federal workers during the shutdown. “This is the risk of shutting down the government and handing the keys to Russ Vought,” Thune told Politico. He also said that “there should have been an expectation” among Democrats that Vought would try to fire workers.

Russ Vought, head of the Office of Management and Budget, is one of Trump’s most controversial appointees. He co-authored Project 2025, a conservative plan for Trump’s possible second term. Project 2025 proposes giving the president direct control over the entire federal bureaucracy, including independent agencies like the Department of Justice. It also calls for removing job protections for thousands of federal employees so they could be replaced by political appointees, and it supports a nationwide ban on abortion.

On Wednesday, Vought told Republicans that the plan to fire federal workers would begin in a “day or two.”

In his interview, Thune blamed Democrats for causing the shutdown that allowed Vought to take these steps. When asked if Vought’s actions to fire workers could confuse or alienate voters, Thune replied, according to Politico: “The only thing I would say about that is yes, and we don’t control what he’s going to do.”

Health and Human Services Secretary Robert F. Kennedy Jr. explained in a post on X why the FDA approved a new generic version of mifepristone. He said the agency had to approve it “because federal law requires approval when an application proves the generic is identical to the brand-name drug.”

Kennedy also shared a letter he had sent last month to Republican attorneys general, promising that the FDA would review abortion pills again. Abortion rights groups warn this could lead to major limits on the most widely used method of abortion in the country.

Kennedy repeated his promise on Thursday, highlighting that the review would also look at access to mifepristone through telehealth visits, which is how many women receive abortion care in states where bans are in place.

National monuments across the United States are closing their doors to visitors due to the government shutdown, but tourists heading to the Statue of Liberty won’t be affected.

“Thanks to the leadership of President Donald J. Trump both Ellis Island and the Statue of Liberty remain open for the enjoyment of the American people,” a spokesperson for the Department of the Interior told the BBC.

Speaking on the Senate floor, Majority Leader John Thune once again called on Senate Democrats to support the House-passed continuing resolution (CR) to reopen the government.

The Senate will not vote on funding bills Thursday but is expected to resume consideration of competing proposals Friday afternoon.

In a Truth Social post, Trump accused Democrats of wanting to divert healthcare funds to “illegal aliens” and open the borders to “criminals of the world.” He called it a “deadly combination,” warning, “everybody will come!”

When Congress fails to pass a funding bill, it falls to the OMB and the president to decide which federal functions are essential and which must pause. Vought is now making high-profile cuts and he is not hiding the political motivations behind them.

Vought announced several funding cancellations, specifically targeting programs he linked to left-leaning policies.

He also froze $18 billion earmarked for a major infrastructure project in New York City, claiming it was being run under “DEI principles,” a reference to diversity, equity, and inclusion initiatives.

Manhattan’s iconic Federal Hall closed to tourists as federal monuments close down during shutdown

In a post on Truth Social, Trump wrote, “I have a meeting today with Russ Vought, he of PROJECT 2025 Fame, to determine which of the many Democrat Agencies, most of which are a political SCAM, he recommends to be cut, and whether or not those cuts will be temporary or permanent. I can’t believe the Radical Left Democrats gave me this unprecedented opportunity. They are not stupid people, so maybe this is their way of wanting to, quietly and quickly, MAKE AMERICA GREAT AGAIN!”

President Trump posted on Truth Social this morning, stating he will speak with Office of Management and Budget (OMB) Director Russ Vought “to determine which of the many Democrat Agencies, most of which are a political SCAM, he recommends to be cut, and whether or not those cuts will be temporary or permanent.”

When asked whether the president has the authority to lay off thousands of federal workers, Johnson said yes.

He explained that Russ Vought, Director of the Office of Management and Budget (OMB), will coordinate with the president to decide which areas won’t receive funding during the shutdown.

“When Congress turns off the lights, it’s the president who determines what gets funded,” Johnson said, adding that any OMB director would prioritise the administration’s key initiatives to ensure those are funded first.

House Majority Leader Steve Scalise is placing blame for the government shutdown on Senate Democratic Leader Chuck Schumer.

“President Trump stands ready to resolve this, but the ball is in Chuck Schumer’s hands right now, he has chosen to shut down the government,” Scalise said.

He added that while negotiations are possible, they can only happen after passing a continuing resolution to temporarily fund the government and reopen federal operations.

Speaker Mike Johnson says the GOP has acted in good faith by proposing a clean, nonpartisan continuing resolution to keep the government running in the short term.

But Democrats argue that’s not sufficient. They are pushing to tie the funding measure to the extension of healthcare subsidies set to expire at the end of the year, demanding progress on that front

House Speaker Mike Johnson has begun speaking, accusing Democrats of being “selfish” for refusing to support the continuing resolution (CR) to keep the government open.

He added that he won’t negotiate on the measure, arguing that Democrats have supported similar CRs in the past.

The government shutdown began Wednesday after Republicans and Democrats in Congress failed to reach an agreement on a new spending plan.

The next Senate vote aimed at ending the shutdown is not scheduled until Friday, leaving federal workers and agencies in limbo.

So far, neither side has shown signs of compromise, raising concerns the standoff could continue, threatening hundreds of thousands of jobs and potentially costing the US economy billions in lost output.

In a Truth Social post, Trump accused Democrats of wanting to divert healthcare funds to “illegal aliens” and open the borders to “criminals of the world.” He called it a “deadly combination,” warning, “everybody will come!”

S&P 500 and tech-heavy Nasdaq opened at record highs on Thursday, boosted by renewed hopes for interest rate cuts. With little new economic data expected over the week as nation enter the second day of shutdown. In the early hours of trading, the Dow Jones Industrial Average (.DJI), opens new tab rose 20.0 points, or 0.04%, at the open to 46,461.11. S&P 500 (.SPX), opens new tab rose 20.1 points, or 0.30%, at the open to 6,731.31​, while the Nasdaq Composite (.IXIC), opens new tab rose 130.7 points, or 0.57%, to 22,885.905.