The White House initiated widespread layoffs on Friday as the government shutdown continued, including the elimination of an entire department within the U.S. Department of the Treasury.
According to an administration official who spoke with the Daily Caller News Foundation, all employees of the Community Financial Institutions Fund (CDFI) were issued layoff notices. The move follows repeated warnings from White House officials that the administration would proceed with large-scale staffing and budget cuts if Democrats did not act to reopen the government.
The CDFI Fund, which employs 102 full-time staff members according to its most recent annual report, is tasked with expanding economic opportunities in underserved communities by supporting financial institutions.
However, critics have argued that the program has strayed from its original purpose and become increasingly 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 measures are expected to affect multiple federal departments, though the total number of employees who will ultimately receive layoff notices remains uncertain.
In the weeks leading up to the October 1 shutdown deadline, the Office of Management and Budget instructed federal agencies to prepare workforce reduction plans targeting positions within programs that currently lack funding or do not align with the president’s policy priorities.
The administration official said the CDFI Fund was targeted for elimination because it had allegedly distributed awards based on race and promoted left-leaning gender and climate initiatives.
Trump previously signed an executive order in March directing federal agencies, including the CDFI Fund, to limit their activities to those explicitly authorized by law. The order was part of his broader effort to scale back federal programs deemed “unnecessary.”
The CDFI Fund previously awarded $4.9 million to the Local Initiatives Support Corporation, an organization that has published materials criticizing “whiteness” in community development. The fund also provided support to LGBTQ clinics offering “gender-affirming hormone therapy” to clients “of any age,” and granted $6.7 million to the Clearinghouse CDFI, which hosted a fashion show promoting transgender themes.
It is unclear whether the staff reductions implemented during the shutdown will withstand legal scrutiny. Several federal employee unions filed lawsuits in late September seeking to block the administration from proceeding with mass layoffs while the government remains shut down.
“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, with more than 800,000 members, is the largest federal employee union.
Vought has been a leading advocate for reducing the size of the federal government and has implemented several cost-cutting measures since the start of Trump’s second term.
Government funding expired early last Wednesday after most Senate Democrats voted against a bipartisan spending measure that would have prevented a shutdown. Senate Majority Leader John Thune has brought the same bill to the floor six additional times during the ongoing stalemate, but Democrats have rejected it each time, with little change in the vote count.
Democrats have called for $1.5 trillion in additional spending for a range of progressive initiatives and have sought to include provisions limiting the president’s authority to rescind funds as part of negotiations to reopen the government. Republicans have dismissed the proposal as unacceptable, calling it “dead on arrival.”
Trump said Thursday that his administration is focusing on scaling back or eliminating government programs strongly supported 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.”