“Sharp Measures” Coming: White House Warns on Back Pay, Job Cuts

The Trump Administration is still dangling the threat of layoffs as the government shutdown drags on, saying layoffs could begin if shutdown talks go nowhere. 

Meanwhile, the Office of Management and Budget (OMB) wrote that furloughed employees are not automatically entitled to back pay. That’s according to a new draft memo obtained by the Washington Post.

OMB’s General Counsel Mark Paoletta argued that the 2019 law that President Trump signed guaranteeing back pay to furloughed workers does no such thing. Paoletta argues that Congress must set aside money for the furloughed employees.

“It is a lucid reinterpretation of the law, but clearly against its intent,” said Robert Shea, a budget expert and former Republican OMB official.

Meanwhile, the Senate voted again to reject a short-term funding resolution, the fifth time it has failed to pass the funding legislation. Democrats want an extension of Affordable Care Act (ACA) subsidies, while Republicans say now is not the time to consider those.  

White House press secretary Karoline Leavitt said that layoff plans remain in the works, although no timetable was given. 

“We don’t want to see people laid off. But unfortunately, if this shutdown continues, layoffs are going to be an unfortunate consequence of that,” said Leavitt. 

And National Economic Council Director Kevin Hassett told CNBC that President Trump may start taking “sharp measures” unless a deal is reached. 

Furloughs Vary, Some Workers Called Back

At least 620,000 federal employees are currently furloughed, as essential employees report to work. Rates vary. For example, more than 90 percent of the Equal Employment Opportunity Commission (EEOC) and Securities and Exchange Commission (SEC) staff is on furlough. At the opposite end, all the Smithsonian Institution employees are working, and just two percent of the Treasury and four percent of the Department of Veterans Affairs (VA) staff is on furlough. 

But things could soon change. The Internal Revenue Service (IRS) is using money from the Inflation Reduction Act (IRA) to keep its workforce going. However, Bloomberg reports that nearly half the IRS workforce could be furloughed this week if no deal is reached. Employees working on filing season activities, implementing legislation, and IT modernization will keep working. And the Smithsonian, which has been operating under prior-year funds, says it will be forced to close its museums on October 12. 

Other agencies are bringing employees back to work. 

The General Services Administration (GSA) brought hundreds of workers who manage the governmentwide real estate portfolio back who had received layoff notices months ago. According to Federal News Network, the shutdown did not change plans to bring the reinstated employees back to work. 

Labor Unions Challenge Layoffs

Meanwhile, federal labor groups are preemptively challenging any shutdown-related layoffs in court. It follows a lawsuit filed earlier by the American Federation of Government Employees (AFGE) and the American Federation of State, County and Municipal Employees (AFSCME). 

The unions have asked a federal judge in San Francisco to issue a temporary restraining order barring any mass firings. 

“We’re facing a health care crisis with millions of Americans about to see their health insurance payments skyrocket, and instead of working across the aisle to solve it, the administration is threatening to use its orchestrated shutdown as an excuse to fire federal workers who perform critical services that Americans rely on. The threatened mass firings are unlawful,” said AFSCME President Lee Saunders.