📝Republicans Could Slash More Government Jobs: Rabobank

On Monday, the Democratic and Republican leadership went to the White House to talk about avoiding a government shutdown on Wednesday. Vice President Vance said that the Democrats presented some ideas that he and President Trump thought were reasonable, but Vance said it was not reasonable to hold those ideas as leverage and shut down the government unless they get everything they want. House Speaker Johnson urged the Democratic leaders to support the 7- week stopgap bill and use that time to discuss full-year spending bills (for FY2026). President Trump also urged the Democrats to get on board with the stopgap measure.

While withholding their support for the stopgap does give the Democrats leverage, we should not forget that the Republicans want to shrink the size of the government, and Trump started his second term with a hyperactive DOGE, the short-lived contribution of Elon Musk to the current administration. Therefore, a shutdown is not all bad from a Republican perspective, because it allows them to lay off civil servants permanently. White House Budget Director Russ Vought has already instructed government agencies to draw up lists of employees to fire if funding is interrupted. This weakens the leverage that Democrats think they have in a standoff. However, they think that rallying around health insurance is going to make them competitive again in the next election. - Rabobank