By Richard Cowan, David Morgan, Nolan D. McCaskill and Andy Sullivan
WASHINGTON (Reuters) -U.S. President Donald Trump warned congressional Democrats on Tuesday that allowing the federal government to shut down at midnight would allow his administration to take "irreversible" actions including shutting down programs important to them.
"We can do things during the shutdown that are irreversible, that are bad for them and irreversible by them, like cutting vast numbers of people out, cutting things that they like, cutting programs that they like," Trump said in remarks to reporters from the White House Oval Office.
"You all know Russell Vought," Trump added, referring to the director of the Office of Management and Budget. "He's become very popular recently because he can trim the budget to a level that you couldn't do any other way." Trump did not specify the actions he might take, but he has raised the possibility recently of further downsizing the federal workforce.
At midnight, the United States will enter its 15th government shutdown since 1981, unless Republicans and Democrats in Congress agree on a deal to temporarily fund federal agencies with Wednesday's start of a new fiscal year.
No signs pointed to such an outcome, however.
The Republican-controlled Senate is expected to vote on a temporary spending bill that has failed once already, with no sign that a second vote will bring success before the midnight deadline (0400 GMT Wednesday).
Democrats want to modify the bill to extend health benefits for millions of Americans that are due to expire at the end of the year. Republicans say they must tackle that issue separately.
Budget-related showdowns have become a routine feature in Washington as the nation's politics have grown increasingly dysfunctional, though they are often resolved at the last minute. The government last shut down for 35 days in 2018 and 2019, during Trump's first term, due to a dispute over immigration.
TRILLION-DOLLAR FIGHT
At issue now is $1.7 trillion that funds agency operations, which amounts to roughly one-quarter of the government's total $7 trillion budget. Much of the remainder goes to health and retirement programs and interest payments on the growing $37.5 trillion debt.
Federal agencies, meanwhile, began to issue detailed plans that would close offices conducting scientific research, customer service, and other activities not deemed essential and send thousands of workers home if Congress does not agree on a fix before funding expires.
Budget experts warned that some Americans already could be feeling the fallout.
With Medicare reimbursements for at-home "acute hospital care" potentially being disrupted, patients were needing to find in-patient facilities, said Jonathan Burks, a health specialist at the Bipartisan Policy Center. "That's a real disruption as we speak," he told reporters early on Tuesday.
He added that Medicare reimbursements for telehealth medical visits also would expire at midnight.
Airlines warned that a shutdown could slow flights, while the Labor Department said it would not issue its monthly unemployment report, a closely watched barometer of economic health. The Small Business Administration said it would stop issuing loans, while the Environmental Protection Agency said it would suspend some pollution-cleanup efforts.
The longer a shutdown lasts, the broader the impact.
Public housing subsidies for low-income families could shrivel and some operators of Head Start early education programs for children of low-income families could see delays in their receiving grant money, according to Bipartisan Policy Center experts.
DEEPFAKE VIDEO
A White House meeting on Monday between Trump and the leaders of Congress led to no agreement. Trump followed up on it by posting a deepfake video showing manipulated images of Democratic Senate Leader Chuck Schumer appearing to criticize Democrats while top House Democrat Hakeem Jeffries stood next to him, with a crudely drawn sombrero and mustache imposed over his face.
Speaking to reporters outside the U.S. Capitol, Jeffries responded to Trump's post: "The next time you have something to say about me, don't cop out through a racist and fake AI video. When I'm back in the Oval Office, say it to my face."
Any last-minute agreement would also have to be approved by the Republican-controlled House, which is not due to convene until Wednesday, after funding expires.
ADMINISTRATION THREATENS MORE LAYOFFS
Trump's willingness to ignore spending laws passed by Congress has injected more uncertainty this time around, and he has threatened to extend his purge of the federal workforce if Congress allows the government to shut down.
In the spring, he ordered federal agencies to consider firing "nonessential" employees who normally would be ordered not to work during a shutdown.
Trump has also refused to spend billions of dollars approved by Congress, prompting some Democrats to question why they should vote for any spending legislation at all. Though Republicans control both chambers of Congress, they need at least seven Democratic votes to pass legislation out of the Senate.
Along with the extended health subsidies, Democrats have also sought to ensure that Trump will not be able to undo those changes if they are signed into law.
Locked out of power in Washington, Democrats are under pressure from their frustrated supporters to score a rare victory ahead of the 2026 midterm elections that will determine control of Congress for the final two years of Trump's term. The healthcare push has given them a chance to unite behind an issue that resonates with voters.
Still, some in the party have questioned whether it is worth risking a shutdown.
“It’s not about politics or who gets blamed for it. It’s about the damage to millions of Americans,” Democratic Senator John Fetterman of Pennsylvania told reporters.
(Reporting by Richard Cowan, Courtney Rozen, David Morgan, Nandita Bose, Andy Sullivan and Bo Erickson in Washington; Additional reporting by Susan Heavey, Doina Chiacu, Nolan McCaskill and Trevor Hunnicutt; Writing by Andy Sullivan; Editing by Scott Malone and Alistair Bell)
