The White House on Friday reportedly initiated sweeping layoffs across multiple federal agencies, including the complete elimination of a Treasury Department office, as the government shutdown stretched into its second week and President Donald Trump’s administration intensified its push to shrink the federal bureaucracy.
The entire staff of the Community Development Financial Institutions Fund (CDFI), a Treasury program that employs 102 full-time workers, received termination notices, according to an administration official.
The official said the program was targeted because it “illegally doled out awards based on race and espoused left-wing gender ideology and radical climate policies.”
“The RIFs have begun,” White House budget director Russell Vought posted on X, using an acronym for “reductions in force.” Administration officials said the layoffs would extend across multiple departments, though it remains unclear how many federal employees will ultimately be affected.
Before the Oct. 1 shutdown deadline, the Office of Management and Budget had instructed agencies to identify employees working in programs that lacked current funding or were “not consistent with the President’s priorities.” The CDFI Fund was among the first to go.
The move fulfills a key promise from Trump’s second-term agenda: to rein in what he calls “bloated and politicized” elements of the federal bureaucracy. The president signed an executive order in March directing agencies to limit their activities to those “legally mandated” by Congress, part of his broader effort to scale back government programs viewed as unnecessary or politically biased.
The CDFI Fund has long described its mission as expanding “economic opportunity for underserved people and communities.” But administration officials and conservative critics argue the agency strayed far from that mission.
The program awarded millions in grants to organizations promoting race-based initiatives and social agendas far afield from financial development, officials said.
Among its recent beneficiaries were groups publishing materials condemning “whiteness,” LGBTQ clinics providing “gender-affirming hormone therapy to clients of any age,” and organizations hosting events “promoting transgenderism.”
Trump’s decision to shutter the fund and authorize broad layoffs comes amid a standoff with congressional Democrats, who have blocked Republican-led spending measures to reopen the government.
The impasse began Oct. 1, after Democrats rejected what Senate Majority Leader John Thune called a “clean bipartisan spending bill” to avert a shutdown. Thune has reintroduced the same measure six times, but each time Democrats have voted it down.
Democrats are demanding $1.5 trillion in new spending on climate, healthcare, and social programs, along with limits on the president’s ability to rescind funds. Republicans have called their proposal “dead on arrival.”
“We’re only cutting Democrat programs,” Trump said Thursday during a Cabinet meeting. “We will be cutting some very popular Democrat programs that aren’t popular with Republicans, frankly.”
In addition to the CDFI layoffs, the administration has frozen $18 billion in federal funds for New York City infrastructure, cut over $7 billion from Biden-era energy projects, and suspended more than $2 billion for Chicago.
The American Federation of Government Employees, the country’s largest federal employee union, condemned the firings and filed suit 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,” union president Everett Kelley said.
House Speaker Mike Johnson, however, praised the administration’s actions. “The great irony is that it is Chuck Schumer delivering that opportunity,” Johnson said. “It gives us a real opportunity, a very rare opportunity, to scale down the size and scope of government.”
Schumer blasted the White House response as “deliberate chaos.”
But for Trump and his allies, the layoffs mark the fulfillment of a campaign promise: using a moment of political gridlock to reshape — and reduce — the federal government he has long argued has grown unaccountable to the people it serves.
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