Federal budget math may thwart Trump’s goal of saving money by cutting workers and projects

The government shutdown, entering its third day Friday, has turbocharged President Trump’s efforts to fire federal workers, reduce spending and eliminate programs he doesn’t like.

He blames Democrats for any firings of federal employees or elimination of lawmakers’ pet projects as a result of the partial shutdown.

“There could be firings, and that’s their fault,” Mr. Trump said in an interview with One America News that aired Thursday night. “There could also be other things. We could cut projects that they wanted, favorite projects, and they’d be permanently cut.”

The president said he didn’t want a government shutdown, but many observers suspect he did because it gives him the power to cut people and projects with which he disagrees.

The administration started cutting employees and projects as the shutdown began. The president said he was meeting with Office of Management and Budget Director Russell Vought on Thursday to discuss which “Democratic Agencies, most of which are a political SCAM,” he thinks should be cut and whether the cuts would be permanent.

“I can’t believe the Radical Left Democrats gave me this unprecedented opportunity. They are not stupid people, so maybe this is their way of wanting to, quietly and quickly, MAKE AMERICA GREAT AGAIN!” he said.

Mr. Vought announced Wednesday that funding totaling roughly $18 billion for two infrastructure projects in New York City had been paused pending review.

The two projects, the city’s Hudson Tunnel and Second Avenue subway, were being checked to “determine whether any unconstitutional practices are occurring,” the Transportation Department said.

Mr. Vought also announced the cancellation of $8 billion for green energy projects in 16 states, which he called “Green New Scam funding to fuel the Left’s climate agenda.”

The Energy Department said Thursday that 321 financial awards for 223 projects were terminated, totaling more than $7.5 billion in savings.

The department said a review found the projects “did not adequately advance the nation’s energy needs, were not economically viable and would not provide a positive return on investment of taxpayer dollars.”

A Congressional Budget Office report estimates that 750,000 employees could be furloughed during the shutdown, which would cost taxpayers $400 million in compensation per day for work not being done. That could vary, depending on how many employees an agency furloughs and the length of the shutdown.

Most of Mr. Trump’s cuts will involve mass firings of federal employees. The president has promised to “cut a lot of the people … on a permanent basis.” An OMB memo last week hinted at such a move.

Republicans, such as House Speaker Mike Johnson of Louisiana, have argued that the shutdown will benefit taxpayers because it would allow the government to be restructured in ways that cannot be carried out through the Senate.

Ryan Young, a senior economist at the free market Competitive Enterprise Institute think tank, said he is skeptical that the shutdown can produce significant cost reductions because Mr. Trump will try to reduce spending by slashing jobs and small programs.

“Job cuts are the primary method [Mr. Trump] wants to achieve savings, but the total federal payroll is roughly $300 billion out of a $6 trillion budget, so less than 5% gets spent on employee payroll,” he said. “That can save billions of dollars, but the budget is so big and the national debt is so large, it’s like throwing a penny into a fountain.”

Enhanced subsidies for the Affordable Care Act are set to expire at the end of the year and are at the center of the shutdown debate. About 22.4 million Americans enrolled in Obamacare are receiving the enhanced subsidies, which were first offered during the COVID-19 pandemic emergency. Extending them would cost taxpayers $350 billion through 2034, according to the Congressional Budget Office.

So cutting off the Obamacare subsidies at the end of the year would save about $35 billion a year over the next decade, out of a $6 trillion budget.

The past 10 shutdowns did not reduce the size or scope of the federal government. In fact, the cost of each shutdown far exceeded any cost savings efforts that emerged to reopen the government.

That’s because the administrative cost of furloughs and shuttering offices, as well as late fees on interest payments and fees, and other charges that go uncollected by the government, add up.

For example, furloughed federal employees are barred from working during a shutdown, but once it ends, federal law requires them to be paid for the time they would have been working. That means American taxpayers are on the hook for billions of dollars in lost productivity.

The past three government shutdowns resulted in more than 56,000 years of lost productivity across all government agencies, despite the shutdowns lasting a combined 50 days, according to a 2019 U.S. Senate report.

However, that report did not include lost productivity data from some of the largest government agencies, including the departments of Defense, Agriculture, Justice and Commerce, meaning the actual total was much higher.

In 2013, the 16-day government shutdown cost taxpayers $2.5 billion in pay and benefits for furloughed employees for hours not worked, as well as $10 million in penalty interest payments and uncollected revenue.

It’s unclear whether the president has the authority to fire federal workers because the funds for their jobs have already been allocated.

Sam Berger, a senior OMB official during the Obama administration who was involved in navigating the 2013 government shutdown, said the firings are vulnerable to legal challenges. He said the firings, known as reductions in force, or RIFs, cannot be carried out by agencies’ human resources departments because they are allowed to undertake only “accepted” activities such as responding to emergencies. He said layoffs wouldn’t fall under that category.

Another legal hurdle for the Trump administration is the Antideficiency Act, which prohibits the federal government from incurring new expenses during a shutdown when funding has lapsed. That could include payments that accompany reductions in force.

However, a president’s authority to carry out layoffs during a shutdown remains untested. The Supreme Court has largely been permissive in recognizing Mr. Trump’s power to fire federal employees.

In July, the Supreme Court green-lighted Mr. Trump’s plan for mass firings and reorganization of the federal government. That followed an April decision in which the court concluded Mr. Trump could eliminate 16,000 probationary employees.

Mr. Berger said this time will be different.

“The issue here is that a shutdown provides no basis for engaging in RIFs,” he said. “RIFs are a permanent response to a permanent problem, while shutdowns are, by their very nature, temporary.”