The White House began conducting mass layoffs on Friday amid a prolonged government shutdown, including slashing an entire department under the U.S. Department of the Treasury.
The entire staff at the Community Financial Institutions Fund (CDFI) received a layoff notice on Friday, an administration official confirmed to the Daily Caller News Foundation. The program’s elimination comes as White House officials repeatedly warned that the administration would pursue mass firings and budget cuts if Democrats did not reverse course and reopen the government.
The agency employs 102 full-time staff, according to its most recent annual report, published earlier this year. The CDFI fund claims to “expand economic opportunity for underserved people and communities by supporting the growth and capacity” of financial institutions, but critics have argued the agency has drifted from its mission and become politicized.
“The RIFs have begun,” President Donald Trump’s budget chief Russ Vought wrote on X on Friday, using an acronym for reductions in force. The reduction-in-force plans are expected to impact departments across the government. It is unclear how many federal workers will ultimately receive layoff notices.
Before the Oct. 1 shutdown deadline, OMB directed agencies to draft reduction-in-force plans for individuals employed in programs that have no current funding source nor align with the president’s agenda.
The CDFI fund was targeted because the program illegally doled out awards based on race and espoused left-wing gender ideology and radical climate policies, according to the administration official.
Trump signed an executive order in March restricting federal agencies, including the CDFI fund, to their legally mandated functions, as part of his broader efforts to reduce elements of the federal government determined to be “unnecessary.”
The fund awarded $4.9 million to the “Local Initiatives Support Corporation,” which publishes material condemning “whiteness” in community development. It has also supported LGBTQ clinics that provide so-called “gender-affirming hormone therapy” to clients “of any age,” and granted $6.7 million to the Clearinghouse CDFI, which hosted a fashion show promoting transgenderism.
It remains to be seen whether staff cuts made during the shutdown will withstand legal challenges. Several federal unions filed suit in late September to block the administration from carrying out mass layoffs during the shutdown.
“It is disgraceful that the Trump administration has used the government shutdown as an excuse to illegally fire thousands of workers who provide critical services to communities across the country,” American Federation of Government Employees (AFGE) national president Everett Kelley said in a statement on Friday. The AFGE is the nation’s largest federal employee union and represents more than 800,000 workers.
Vought, the White House Office of Management and Budget director, has long sought to cut the size of government and has taken concrete steps to slash federal spending since the beginning of Trump’s second term.
Government funding lapsed early last Wednesday after a majority of Senate Democrats soundly rejected a clean bipartisan spending bill to avert a shutdown. Senate Majority Leader John Thune has put the same bill on the floor an additional six times as the shutdown drags on and Democrats have tanked the bill each time with the vote tally largely unchanged.
Democrats have demanded $1.5 trillion in new spending on a variety of left-wing priorities and language restricting the president’s authority to rescind funds in exchange for their votes to fund the government. Republicans have labeled Democrats’ counter-funding proposal dead-on-arrival.
Trump said on Thursday that his administration was zeroing in on government programs favored by Democrats.
“We’re only cutting Democrat programs, I hate to tell you, but we are cutting Democrat programs,” the president said during a Cabinet meeting. “We will be cutting some very popular Democrat programs that aren’t popular with Republicans, frankly.”
The administration has already cut over $7 billion in funding for Biden-era energy projects, and frozen $18 billion in New York City infrastructure projects and over $2 billion in Chicago.
House Speaker Mike Johnson told the DCNF in an interview on the second day of the shutdown that he welcomed the administration slashing the size of government during the funding lapse.
“The great irony is that it is [Senate Minority Leader] Chuck Schumer that is delivering that opportunity,” Johnson told the DCNF. “I have always believed, said, and acted accordingly that the federal government is too large, it has too many things, and it does almost nothing well.”
“It gives us a real opportunity, a very rare opportunity, to scale down the size and scope of government,” Johnson continued. “And I expect that’s what you will see in short order.”
Schumer blasted the news of mass layoffs on social media Friday.
“This is deliberate chaos,” Schumer said in part.
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