Shutdown hostage taking

Russ Vought's threatens more mass firings; SCOTUS blesses his de facto impoundment

Haiyun Jiang/The New York Times

Nice government you’ve got there. Shame if anything were to happen to it. Maybe some more federal employees disappear. I don’t want to do it. You are forcing my hand. But you know I’ve done it before.

This, in a nutshell, is the White House negotiation strategy over the government shutdown. They are offering no concessions, and Trump refuses to meet with Democratic leaders. Instead, they are engaged in hostage taking. Russ Vought, head of the Office of Management and Budget, is promising mass firing of federal employees if Democrats do not vote for a continuing resolution to keep the government open. He issued a memo to agencies blaming Democrats for the shutdown, and saying that programs where funding has run out “are no longer statutorily required to be carried out.” He encouraged agency heads to consider firing employees who work on those programs.

Shutdowns, like debt ceilings, are a peculiarly American contrivance to undermine its own governance. Other rich countries typically do not stop providing services or paying their employees when their political parties cannot pass a budget. Indeed, in parliamentary systems, it is the politicians, not the public employees, who pay the price for a budget impasse, since this typically triggers an election.

But ever since President Carter’s Attorney General, Benjamin Civiletti, decided that budget impasses demanded government shutdowns, they have become an increasingly common feature of American politics.

Shutdowns are not costless. They have well documented disruptive effects on the economy, and on the delivery of public services. As William Resh and I wrote during a previous shutdown crisis:

Shutdowns may be the preferred outcome for those that despise the government, but they have real costs for the work of public organizations. Strategic plans have to be set aside, and programs delayed. Scientific agencies stop the flow of grants, time-dependent lab work may be abandoned. Parks employees are unable to protect against vandalism. Regulatory inspections are backlogged. IRS employees lose time to be retrained in tax code changes. Federal court proceedings are slowed. When the shutdown ends, the simple administrative hassles of catching up with emails, completing time cards, creating new passwords, or designing new contracts distract from core tasks. These implementation hurdles slow government activities, To give a sense of scale, the 2019 shutdown caused an estimated $18 billion delay in federal spending.

Resh, Yongjin Ahn and I analyzed the last Trump shutdown, using federal employee survey data.¹ We found that earlier shutdowns had a corrosive effect on employee morale. We also found that federal employees exposed to shutdowns reported more administrative dysfunction on multiple dimensions: unmanageable workloads, missed deadlines, projects that were abandoned or delayed, and time lost to restarting work. Other research has found that being exposed to shutdowns leads to more employees exiting the agency.

So shutdowns really do matter to state capacity, both in terms of immediate ability to do perform basic governing tasks in a timely way (which is the standard definition of state capacity) and in terms of the long-term ability to attract, retain and motivate talented employees to perform those tasks.

But Russ Vought wants to make this worse. Vought’s strategy is that the (unfortunate) designation of essential/non-essential employees for the purposes of shutdowns should become the basis for further downsizing the government. If they are non-essential, then maybe they should be fired, according to Vought.

To be very clear, Vought is under no legal obligation to fire public employees because of a shutdown. This has never been a feature of any previous shutdown, where some employees are furloughed and then provided backpay when they return.

The guy who promised to put federal employees “in trauma” is relishing the chance to hold them hostage. The guy who said “We want to make sure that the bureaucracy can’t reconstitute itself later in future administrations” is using a budget impasse to permanently shrink government.

Vought made similar threats during the last shutdown impasse in the spring, which Schumer pointed to in justifying his decision not to trigger a shutdown. But things have gotten dramatically worse, and the administration has shown it will engage in mass firings anyway, so now Schumer is now saying he won’t be driven by “an attempt at intimidation.”

The drumbeat for Democratic leaders to do something, anything, to demonstrate opposition to Trump is also much stronger than it was before. Ezra Klein urged Democrats to “stop acting like this is normal”: if they believe their own rhetoric that Trump is dismantling democracy, they should no longer continue to support the government.

Congressional expert Matt Glassman offers a thoughtful rebuttal on why shutdowns could backfire for Democrats. I am not so sure, given that Republicans have unified control of government. Josh Huder also argues that Schumer is being pushed to shutdown to maintain party unity — and possibly his job.

Republicans are unified: no-one in Congressional leadership seems too bothered about the idea of shutting down the government, or worries about keeping their job. Republicans have a simple message: pass a clean continuing resolution. They can bring up continuing resolutions at will and force Democrats to vote against them.

By contrast, Democrats have demands. Those demands are relatively modest: mostly, to undo the end to Affordable Care Act Medicaid subsidies. This falls short of what many progressives wants, and Klein called for, which is to focus a debate about Trump’s authoritarianism. What that looks like in terms of a tangible ask is harder to make out. Some have called for RFK Jr. to be fired, or for new policies that restrict ICE.

Even the proposed health care demands do not address the ways that health insurance access will be hurt because of Trump policies (e.g. Medicaid work requirements). It also gives Republicans a path out of a policy that will be very unpopular once millions of people’s health insurance costs skyrocket next year. Some Republicans might want to make that deal, but assume they can make it after Democrats are blamed for a shutdown.

In the meantime, the Trump administration will use this as an opportunity to link Democrats to the people Republicans are demonizing at this political moment. For JD Vance, it is immigrants:

For Trump, it is trans people.

Needless to say, these are lies. Undocumented immigrants cannot receive benefits from the Affordable Care Act marketplace. I don’t even know where to start with “transgender for everybody.”

More mass firings will weaken the GOP shutdown position

Republicans clearly think they have the upper hand in the shutdown blame game, and they may be right. This, alongside the Democratic leadership belief that they have to do something, is why a shutdown feels inevitable. It is also why I think Vought’s threats are not just bad governance, they are also bad politics.

If Vought engages in a further gutting of the federal government after 1 in 8 federal employees have left, it puts the focus on how the Trump administration is using the shutdown for partisan purposes.

Trump explicitly endorsed and expanded Vought’s hostage taking strategy, talking not just about “cutting vast numbers of people out” but also cutting access to safety net benefits.

Trump also said: “When you shut it down, you have to do layoffs.” This is a lie. The layoffs are a choice, the shutdown is the excuse.

Vought, meanwhile, is engaged in targeted impoundments, cutting billions in appropriated funds from New York and blue states.

Coming on the heels of massive layoffs, such threats remind the public of those layoffs, and the fact that OMB can already fire lots of employees through a legal Reduction-in-Force (RIF) process. It does not need a shutdown to do so. Access to safety net benefits is endangered during shutdowns because of employee shortages which are worse because of the layoffs, but as with the threatened firings, Trump is suggesting worsening the situation by deliberately blocking those benefits.

Vought would happily sacrifice state capacity to win a political fight. Trump has signed on to Vought’s agenda, and made him a national figure, for example by posting AI-slop of Vought as the grim reaper:

Congressional leaders have fallen in line behind Vought. Speaker Mike Johnson said: “It can provide an opportunity to downside the scope and scale of government, which is something that we’ve always wanted to do.”

The administration is gambling the idea that the public will buy the false claim that the cuts they are imposing are caused by the shutdown. This is simply not true, and if people start to understand that Vought is imposing needless pain, using the shutdown as an excuse to hurt public services and blue states, the Republican position looks a lot harder to defend. It is therefore substantively important that the media cover this point accurately.

Threatening more layoffs at a time when some Trump officials are willing to admit that they are shorthanded, to the point that they are now rehiring old employees, reeks of incompetence. For example, the GSA, which manages buildings and contracts for the federal government, is asking hundreds of federal employees who it previously fired to return to work.

“They didn’t have the people they needed to carry out basic functions” according to one GSA employee. DOGE officials did not know what they were doing, and tried to cancel leases and sell government buildings even as they were telling federal employees to return to office. Most of those DOGE officials have moved on, so its not their problem anymore. Leases lapsed, and GSA is now being forced to pay significant financial penalties to landlords for continuing to occupy buildings. Incompetence has a cost.

It is not just the GSA. The IRS is also recalling employees. The nominal head of DOGE, Amy Gleason, says the government needs to hire tech talent after DOGE gutted 18F and the US Digital Service.

Shutdowns are unpopular precisely because they remind the mass public that the government employees actually do perform important tasks. Non-essential does not mean unimportant. Employees work in programs that Congress has created, fulfilling statutory tasks that will remain when the shutdown is over. There will be a wave of stories about furloughed federal employees — or fired employees if Vought has his way — who are offered a rare chance to explain what they do. Shutdowns also remind the public that the vast majority of federal employees are not an abstraction residing in a DC swamp, but their neighbors across the United States.

The Trump administration already has the National Guard doing the work of laid-off National Parks employees. What happens when they have to close the visible representations of America’s government?

Vought’s threats do what Democratic demands for ACA subsidies do not: they remind the public of the heavy-handed way that Trump has governed. The taste for retribution. The embrace of illegal tactics. The desire to hurt people needlessly. The indifference to the actual public services they are charged by the constitution to deliver.

As DOGE has exited the scene, Russ Vought is now primarily responsible for the condition of the federal workforce. He is using the government shutdown not to engage in financial stewardship, but to impose his ideological vision: a smaller and demoralized government. In doing so, he is also dismantling Congressional influence.

Many Republicans in Congress seem ready to go along with this, reasoning that a Democratic President will not exploit future shutdowns in the same way. This is the asymmetric logic of the Trumpist assault on the administrative state: they assume Dems will not damage the administrative state, so the use of such tools will not result in retaliation. But how many Republicans will struggle to credibly blame Democrats for the shutdown when their own party is using it as an excuse to dismantle the programs that Republicans say should be funded?

Siding with the hostage takers

Professor Don Kettl argues that Vought’s approach is best understood as “a back door impoundment” — using the shutdown to pursue his long-term goal of reducing the government, even if Congress disagrees.

Does this all sound vaguely illegal? RIFs have their own legal basis, which does not include mass layoffs because of budget disagreements. Public sector unions are suing Vought, saying his plan will “strip employees of back pay rights, violate agencies’ statutory duties, and even target workers whose jobs are essential to protecting life and property during a shutdown.” But Professor Nick Bednar argues that even if shutdowns do not provide any extra authority for Reductions-in-Force (RIFs), courts are likely to allow agencies to make cuts on the basis of shutdown-related funding shortage, because they tend to give agencies a lot of leeway on these matters.

Another reason for pessimism is that the Supreme Court has largely sided with the hostage takers. A consistent pattern has emerged. The Trump administration does something illegal, lower courts try to stop it, the Trump administration asks the Supreme Court to bless their illegality, and the Court duly obliges with hastily written emergency orders.

For example, a judge recently ruled that the layoffs of probationary employees by the Trump administration was illegal, but that too much time had passed to remedy the problem. More precisely, the Supreme Court, again and again, allows too much time to pass to fix the illegal actions of the Trump administration. Instead, it consistently jumps in to overturn lower courts that have ordered the Trump administration to stop their illegal behavior, allowing the damage to be done.

We were offered another blatant example of this pattern in the Department of State vs. the Aids Advocacy Coalition. At issue was $4 billion dollars in foreign aid appropriated by Congress that the Trump administration wanted to cancel. The Trump administration went through the legal process of asking Congress to rescind the spending. Congress declined to act, meaning the money was still obliged to be spent. The administration refused to spend it. Grantees who would have received the money sued.

This type of impoundment is clearly illegal. That much is clear from the Impoundment Control Act, passed after President Nixon engaged in exactly the same behavior. But Russ Vought and Trump want it to be legal, and so they act as if it is, and ask the Supreme Court to go along with it. And once more, the Supreme Court agrees.

More specifically, in an unsigned couple of paragraphs, the conservative majority issued an emergency order, overturning a lower court decision. While the majority said they were not making a decision on the merits of the case, reversing the Trump administration’s cancelation of the funds is not possible. The fiscal year ends on September 30th, after which grantees who would receive the funds are in the same position of the probationary employees that Trump fired: without meaningful recourse.

The result is a de facto approval of a Trump impoundment. It blesses the Vought “pocket rescission” strategy of refusing to spend money, and then claiming the administration has run out of time to spend the money. In this context, any budget deal with Trump is of little value because the Supreme Court allows him to go back on it.

It is hard to overstate how weak the government’s case was. The Trump administration argued that the Impoundment Control Act prevents grantees from suing. In her dissent, Justice Kagan pointed out that this interpretation required ignoring the plain text of the Act:

But the text of the ICA refutes that notion. As against the Executive’s argument about “implied” meaning are the statute’s express words. In its very first section, titled “Disclaimer,” the ICA declares: “Nothing contained in this Act . . . shall be construed” as “affecting in any way the claims or defenses of any party to litigation concerning any impoundment.” § 681(3). It is hard to write a clearer and a more emphatic non-preclusion provision than that.

The majority judged that “the asserted harms to the Executive’s conduct of foreign affairs appear to outweigh the potential harm faced by respondents.” This is, again, nonsense. The harms to the constitutional order of allowing a de facto impoundment are what is at stake. Kagan’s dissent notes that the “irreparable damage” that the Trump administration claims it would suffer are:

just the price of living under a Constitution that gives Congress the power to make spending decisions through the enactment of appropriations laws. If those laws require obligation of the money, and if Congress has not by rescission or other action relieved the Executive of that duty, then the Executive must comply. It cannot be heard to complain, as it does here, that the laws clash with the President’s differing view of “American values” and “American interests.” That inconsistency, in other words, is not a cognizable harm, to be weighed in the equitable balance. It is merely a frustration any President must bear.

The “irreparable damage” that the Trump administration seeks to avoid, whether impounding Congressional funds or sacrificing its own employees in budget negotiations, is that anyone question that Trump’s status as a sovereign King, rather than a President in a system designed with checks and balances. Actual harms to the victims of Trump and Vought’s actions — federal employees losing their jobs, non-profits that may have to close, the public they serve, and ultimately the ability of Congress to respond to that public — are of secondary importance to protecting the grace and majesty of Trump under our new constitutional order.

1. The Trump administration is no longer collecting this data for the same reason it is not collecting lots of data — it wants to bury evidence of the dysfunction it is creating.