Philly could have 'cash flow problem' if shutdown lingers; Trump to talk permanent layoffs, targets regional projects

On the second day of the government shutdown, some workers in the Philadelphia area were contending with the uncertainty ahead.

At the Environmental Protection Agency, an employee who works out of the agency’s Center City office in Philadelphia says it was unclear how many carry-over funds EPA had to continue operating despite the government shutdown. The agency sometimes has residual funds that allow it to continue functioning normally for some time. The employee, whose work focuses on water, spoke on the basis of anonymity for fear of workplace retaliation.

“They won't tell us how much money is available, and so we just need to check our email every night to see if we're supposed to come in tomorrow, which is a pretty stressful way to live the day to day to not [be] sure if you're going to get a paycheck for the next day of work,” she said.

Mayor Cherelle L. Parker said Thursday that Philadelphia would have a “cash flow problem” if the federal government shutdown and state budget impasse aren’t resolved by Dec. 1.

“We have so many challenges that are facing the city of Philadelphia with limited funds in order to address them,” Parker said at a news conference. “We hope that we get some resolution as soon as possible at both the state and the federal levels, because if we don’t, Philadelphia will have a cash flow problem beginning December the one. So I am staying laser focused on that, and we are focused on what we have the ability to influence here in our city.”

Parker did not elaborate on the funding streams that could dry up if the partisan deadlocks don’t break in Harrisburg and Washington. Across all funds, Philadelphia received $2.2 billion in the 2024 budget year. The largest source of federal funds was $1.2 billion for the Medicaid-funded HealthChoices program, which provides mental health and substance abuse treatment for low-income residents.

A Medicare program started during the pandemic that allows healthcare systems to provide hospital-level care in patients’ homes was among the immediate casualties of the federal government shutdown. The program’s authorization was tied to the federal spending legislation that expired Tuesday.

The impact is minor in the Philadelphia region.

In anticipation of the shutdown, South Jersey’s Virtua Health stopped admitting patients to its “hospital at home” program Friday and discharged its last patient Monday. Virtua’s five hospitals, with nearly 1,500 licensed beds, averaged eight patients a day, the nonprofit said.

Senate Majority Leader John Thune (R., S.D.) said the government shutdown would extend into next week if Democrats don’t vote for a short-term funding bill Friday.

“We’re going to be voting tomorrow,” Thune said on the Senate floor Thursday. “And we’re going to be giving my Democratic colleagues another opportunity to reopen the government by passing the clean, no-partisan funding extension before us.”

The Senate isn’t voting Thursday in observance of Yom Kippur. 

The Energy Department is canceling hundreds of clean energy projects in Democrat-led states, including in New Jersey and Delaware as President Donald Trump’s administration uses the government shutdown to make additional federal workforce and funding cuts.

Russ Vought, director of the Office of Management and Budget, said on Wednesday that the department would end funding for projects in 16 states totaling $8 billion.

“The Left’s climate agenda is being canceled,” Vought posted on X.

House Speaker Mike Johnson said the government shutdown gives President Trump and his budget director vast power over the federal government.

The White House is preparing to unleash mass layoffs and funding cuts during the shutdown, and Johnson, a Louisiana Republican, agreed the president has the constitutional power to make those decisions.

Blaming Democrats, he said “they have effectively turned off the legislative branch” and “handed it over to the president.”

President Donald Trump and the congressional leaders aren’t expected to meet again soon. Congress has no action scheduled Thursday in observance of the Jewish holy day, with senators due back Friday. The House is set to resume session next week.

The Democrats are holding fast to their demands to preserve health care funding and refusing to back a bill that fails to do so, warning of price spikes for millions of Americans nationwide. The Kaiser Family Foundation estimates insurance premiums will more than double for people who buy policies on the Affordable Care Act exchanges.

The Republicans have opened a door to negotiating the health care issue, but GOP leaders say it can wait, since the subsidies that help people purchase private insurance don’t expire until year’s end.

Could the government shutdown impact the economy? The head of the Treasury Department thinks so.

"We could see a hit to the GDP, a hit to growth, and a hit to working Americans," Treasury Secretary Scott Bessent said during an interview on CNBC Thursday morning.

Historically, shutdowns haven't had much impact on the U.S. economy because they've generally been short-lived, lasting less than a week, on average. It's unclear what impact a longer shutdown could have.

Jack Ciattarelli, the Republican nominee for New Jersey governor endorsed by President Donald Trump, did not mention the government shutdown in a speech at a South Jersey campaign event Wednesday evening. His speech lasted more than 15 minutes.

His campaign did not make him available for an interview after his speech.

Ciattarelli told NJ.com reporter Brent Johnson Wednesday afternoon that he doesn’t know who to blame for the shutdown because he doesn’t “know enough about the details.”

President Donald Trump will meet today with Russell Vought, the director of the Office of Management and Budget, to discuss permanent layoffs of federal workers and dramatic cuts to "Democrat Agencies" as the government shutdown continues.

Normally, federal workers furloughed during a shutdown return to their jobs and receive back pay when the government reopens. But this time Trump has threatened to use the shutdown to enact permanent layoffs and program cuts.

"I can’t believe the Radical Left Democrats gave me this unprecedented opportunity," Trump wrote on Truth Social, his social media platform, Thursday morning.

President Donald Trump has seized on the government shutdown as an opportunity to reshape the federal workforce and punish detractors, by threatening mass firings of workers and suggesting “irreversible” cuts to programs important to Democrats.

Rather than simply furlough employees, as is usually done during any lapse of funds, White House press secretary Karoline Leavitt said layoffs were “imminent.” The Office of Management and Budget announced it was putting on hold roughly $18 billion of infrastructure funds for New York’s subway and Hudson Tunnel projects — in the hometown of the Democratic leaders of the U.S. House and Senate.

The office also canceled nearly $8 billion for 223 clean energy projects set to go to 16 states controlled by Democrats, including New Jersey and Delaware. The Department of Energy didn't announce which specific projects were canceled.

As Philly tourists lamented the shutdown’s effects, the region’s more than 46,000 federal workers faced an unstable future.

Some have been furloughed, while others, such as TSA employees and air traffic controllers at Philadelphia International Airport, are considered essential, and will be required to continue working despite the shutdown and temporarily suspended pay.

And while operations at the airport continued to run smoothly Wednesday morning, morale among its hundreds of TSA workers was “dropping lower than the normal low,” said Joe Shuker, vice president of AFGE Region 7, the union that represents those employees.

Lawmakers on Capitol Hill closed out Day One of the government shutdown Wednesday with no resolution in sight.

The Republican plan to reopen the government failed earlier Wednesday, lacking Democratic support. Senators will return to vote again on the GOP measure on Friday.

Well, for the most part.

Despite the shutdown — the first since a 2018-19 funding lapse that lasted 35 days — some federal apparatuses remained open in the Philadelphia region.

Federal courts, for example, were expected to operate at full capacity through at least Friday. They will dip into a reserve balance of court fees and other revenues that are not appropriated by Congress, but it remained unclear how long the courts would be able to operate. Federal prosecutors, the Department of Justice said last week, are expected to continue working on criminal cases “without interruption.”

Also continuing their work are Immigration and Customs Enforcement agents, with most of the agency’s work having been deemed essential. Immigration Court in Philadelphia also remains open, and U.S. Citizenship and Immigration Services, which administers the nation’s legal-immigration system, is expected to remain operational, as much of its funding comes from fees rather than Congress.