US Government Shutdown Enters Day 10: Federal Layoffs Begin, Economy Strains Amid Failed Negotiations

The U.S. government shutdown has now entered its 10th day, with no resolution in sight, affecting millions of Americans and reverberating through the economy. As negotiations between Republicans and Democrats remain deadlocked, the situation deepens, bringing serious consequences for federal workers, the public, and the nation’s economy. Here’s a detailed breakdown of the latest developments surrounding this unprecedented deadlock.

The government shutdown began on October 1, 2025, after the Senate failed to pass the Republican-backed continuing resolution bill that would have funded government operations until November 21. The main sticking point has been disagreement over healthcare subsidies under the Affordable Care Act. Republicans accuse Democrats of pushing provisions that would expand benefits to undocumented immigrants, a demand Democrats deny. Both parties have blamed each other for the impasse, with House Speaker Mike Johnson and President Trump attributing the shutdown entirely to Democratic intransigence, while Democrats accuse Republicans of refusing meaningful negotiations.​

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As the 10th day unfolds, the Trump administration has started executing layoffs of non-essential federal employees, a move unprecedented in recent shutdowns. The Office of Management and Budget Director Russ Vought confirmed that “Reductions in Force” (RIFs) have begun, with over 4,000 workers across departments including Treasury, Homeland Security, and Health and Human Services receiving layoff notices. These layoffs are seen as part of an administration strategy to increase pressure on Democrats by threatening job cuts and economic disruption in Democrat-leaning areas.​

Many federal workers have already been furloughed without pay, and more layoffs are expected if the shutdown persists. Military personnel face the prospect of missing paychecks starting mid-October, heightening stress within the armed forces community.​

The shutdown is causing significant delays in critical infrastructure projects nationwide. For example, roughly $18 billion in funding for major New York City projects, including the Hudson Tunnel and Second Avenue Subway, is on hold. Chicago’s $2 billion transit modernization effort and $8 billion in climate-related initiatives are similarly stalled. These freezes not only impact local economies and employment but also threaten longer-term national infrastructure development goals.​

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Consumer confidence has dipped slightly but remains relatively stable as of early October, with inflation and labor market conditions viewed as bigger concerns than the shutdown itself. However, prolonged shutdowns risk deeper economic disruptions, including reduced government services, slower regulatory approvals, and delays in unemployment benefits and tax processing.​

Public access to services has been curtailed as Smithsonian museums and the National Zoo operate on limited funding. Various federal agencies are operating with skeleton crews. The shutdown also slows vital social services like food security programs, suicide prevention efforts, and disaster response readiness during an active hurricane season. This degradation of essential services is causing widespread frustration among citizens, who also face delays in passport processing and benefits.​

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Despite attempts to negotiate, legislative gridlock persists. Senate Majority Leader John Thune has indicated no votes will take place over the weekend, pushing further delays. Notably, both Republican and Democratic proposals to fund the government temporarily have failed to reach the 60-vote threshold required to overcome Senate filibusters.

President Trump has doubled down on his stance, vowing to cut so-called Democrat-oriented programs and blaming Democrats exclusively for the shutdown. Meanwhile, Democrats continue to insist that negotiations only resume when Republicans engage seriously on healthcare subsidy extensions and budget fairness.​

As day 10 of the government shutdown passes, the crisis shows no sign of immediate resolution. With federal workers facing layoffs, economic consequences expanding, and public services strained, the stakes are high. The coming days will be critical in determining whether Congress can break the deadlock or if the shutdown will drag on, further deepening the impact on the American people and economy.