Risk of US Government Shutdown: Federal Agencies Ordered to Cut Staff

Preparing for a US Government Shutdown: Staff Reduction Plans

The administration of US President Donald Trump has instructed federal agencies to plan for staff reductions ahead of a possible government shutdown on October 1, 2023.

CNN reports that the White House Office of Management and Budget (OMB) has sent a memo to federal agencies informing them that employees working on programs that are no longer legally required to continue in the event of potential funding cuts in the federal budget should be notified.

"Federal programs that are defunded and not otherwise funded are no longer legally required to continue," the OMB memo said.

Congressional Process and Interim Budget Preparations

The OMB memo also noted that once Congress approves the fiscal year 2026 budget, these plans will be updated, and only essential staff for legally mandated essential services will continue to work. Although in past years Congress has approved a stopgap budget, this year could be different, the OMB report said.

Last week, the House of Representatives passed a stopgap budget bill to extend current spending through November 21, 2023, but the OMB report claimed that Democrats blocked the bill in the Senate.

"We are hopeful that Democrats will not trigger a shutdown in Congress and that these steps will not be necessary," the OMB memo said. President Trump reportedly supports the stopgap budget and is seeking a compromise from Democrats to avoid spending cuts after September 30.

The Stopgap Budget and the Functioning of the Federal Government

Under US law, if Congress fails to approve the budget for the fiscal year that begins on October 1 and ends on September 30 each year, the process must be managed through stopgap budgets. During periods when a stopgap budget is not approved, the federal government must suspend all but essential services.