White House Denies Layoffs Due to Shutdown, Vows to Retain Workforce

The White House walked back President Donald Trump's claim that government employees are already being laid off due to the government shutdown, though officials warned job losses could still happen as the crisis drags on.

The Republican-controlled Senate rejected funding measures for federal agencies for the fifth time Monday. Neither a Republican proposal to fund operations through November 21 nor a Democratic alternative that would also extend expiring healthcare support had enough backing to pass.

Trump said Sunday that layoffs were happening right now. But White House spokesperson Caroline Leavitt clarified Monday that he was referring to employees who've been placed on temporary leave since Congress let funding expire in early October.

Here's where it gets concerning for federal workers: Leavitt told reporters that the White House budget office "continues working with agencies on who will unfortunately need to be laid off if this shutdown continues."

The situation puts roughly 875,000 federal employees at risk. During past shutdowns, furloughed workers eventually got back pay once funding resumed. But actual layoffs would mean permanent job losses - something that hasn't happened in previous government closures.

For markets, prolonged shutdowns typically create uncertainty around economic data releases and regulatory functions. The longer this drags out, the more it could affect everything from national park tourism to food safety inspections. And if layoffs actually happen, that would mark a significant escalation from how these budget fights usually play out.