The S&P 500 (SPX) is taking a hit after the White House cautioned that a government shutdown could lead to permanent layoffs for some federal workers.
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In a memo obtained by Politico, the Office of Management and Budget recommended that federal agencies “use this opportunity to consider Reduction in Force (RIF) notices,” adding federal programs that face a lapse in funding would be targeted.
Democrats Under Fire as Funding Deadline Approaches
Democrats are now under intense pressure to secure a funding deal, as previous government shutdowns generally resulted in temporary furloughs for some government workers instead of permanent job cuts. Last week, the House passed a Republican funding bill, although the measure was unable to make it through the Senate. Afterward, President Trump accused Democratic lawmakers of seeking “radical” demands.
Funding for the government is set to run dry on October 1 unless Congress can agree to funding extension terms.
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