Hundreds of thousands of federal workers found themselves furloughed or working without pay when they woke up Wednesday morning, after government funding lapsed overnight.
The government shutdown marks the first time since January 2019 that lawmakers failed to strike a deal to keep federal agencies open. The previous shutdown, during President Trump’s first term, lasted 35 days — the longest in history.
The Congressional Budget Office (CBO) estimated the last shutdown reduced economic output by $11 billion during the following two quarters, including $3 billion the U.S. economy never gained back.
The CBO has more recently estimated that approximately 750,000 employees could be furloughed each day of a shutdown. Their total compensation would cost the U.S. economy roughly $400 million each day they are out of work.
Congress has traditionally voted to retroactively pay federal workers who were furloughed or working unpaid, once a deal is reached to reopen the government.
But after the 2018-19 shutdown, Congress passed the “Government Employee Fair Treatment Act of 2019,” which mandates back pay for federal employees and public employees in Washington, D.C., who are furloughed or required to work unpaid during a government shutdown.
“The employees must be compensated on the earliest date possible after the lapse ends, regardless of scheduled pay dates,” the law reads. “Employees required to work during the lapse in appropriations may use leave.”
Still, some questions remain over the fate of federal workers amid the lapse in funding.
The White House amped up pressure on Democrats last week with a memo from the Office of Management and Budget directing agencies to prepare for mass layoffs in the event of a lapse in discretionary funding starting Oct. 1.
While some federal employees are furloughed during shutdowns, the memo signaled the Trump administration would seek to permanently fire personnel during the shutdown.
The White House reiterated this week that layoffs are coming. Trump said Tuesday that “a lot” of federal workers may be laid off, while not offering specifics.
“We can do things during the shutdown that are irreversible, that are bad for them [Democrats] and irreversible by them,” the president said. “Like cutting vast numbers of people out, cutting things that they like, cutting programs that they like.”
Democratic leaders dismissed the initial layoff threat as a tactic to force them to agree to the House-passed “clean” funding bill. But some Democrats have quietly expressed concern about the looming firings, with little assurance that seeking to block the move in court will be successful.