Threat of federal firings hangs over Washington as government will remain shut down through at least Friday

By Sarah Ferris, Morgan Rimmer, Manu Raju, Annie Grayer, CNN

(CNN) — Congress left town Wednesday without a solution to break its bitter impasse over government funding, with the shutdown now set to last until at least Friday when members return for more votes.

But with both parties dug in, many believe it could last even longer than that.

The White House is amplifying pressure on Democrats to cave, as President Donald Trump’s budget chief privately warned House Republicans on an afternoon conference call that mass layoffs would go into effect within the next two days, according to multiple people on the call. Russ Vought told the senators that layoffs would target agencies that don’t fit into the Trump administration’s priorities, the people said.

So far, however, Democratic leaders show no signs of backing down in the shutdown fight.

Many Democrats — including House Minority Leader Hakeem Jeffries — downplayed the threat of mass firings as they argued that the White House had been already whittling down the size of the federal workforce.

“This is a job killing administration,” Jeffries said, arguing that Trump has been doing this since he was inaugurated. “So all this talk that we see right now as if it had anything to do with the shutdown that Republicans have caused. No, it’s their ideology. Cruelty is the point.”

Inside the Capitol, little changed Wednesday. Senate Democrats again voted down the GOP’s funding plan because it did not include a guarantee for enhanced Obamacare subsidies. And Republican leaders reiterated that they’re only willing to negotiate on that soon-to-expire policy once Democrats help reopen the government.

“We just keep telling them, just open up the government and we’ll get on with all the other business,” Senate Majority Leader John Thune told reporters Wednesday. He suggested he could soon meet with his Democratic counterpart, Minority Leader Chuck Schumer, but said bluntly: “I’m not sure what we’ll achieve by that.”

In addition to the threat of mass layoffs, Vought announced the White House was withholding $18 billion on a pair of critical New York City infrastructure projects in a clear attempt to pressure Congress’ top two Democrats, who both represent the state.

Democrats were particularly critical of the White House’s move to sit on the New York infrastructure cash. In a joint statement, Schumer and Jeffries blasted Trump for “treating working people as collateral damage.” Sen. Elizabeth Warren of Massachusetts accused Trump of using the government to “punish his political adversaries.” Sen. Kirsten Gillibrand of New York called it “Total BS.”

On the first full day of the shutdown, the only signs of movement came from a small group of bipartisan senators, who have begun scrambling behind the scenes to reach a bipartisan deal to end the shutdown before it results in nationwide closures and layoffs.

Those talks — some of which have been happening in private — spilled into the open Wednesday afternoon as more than a dozen senators huddled on the floor to discuss a potential end to the shutdown. Members said they’re discussing a deal on Obamacare subsidies that would be slightly less generous than current policy, while also allowing the Senate to move ahead with bipartisan appropriations bills.

Some emerged surprisingly upbeat, even as senators left for the next 24 hours to allow members to observe the Jewish holiday of Yom Kippur. Democratic Sen. Richard Blumenthal walked away from the conversation on the floor predicting a shorter shutdown now that the two parties are engaged in conversations — even preliminary ones.

“There is a lot of bipartisan hope that we can make this shutdown as short and costless as possible,” the Connecticut Democrat said before adding: “Obviously we’re standing strong.”

But GOP leaders in both chambers are skeptical of these bipartisan talks, insisting that Democrats must take the offer that’s already on the table, according to multiple people familiar with the discussions.

But some Republican senators — including Sen. Mike Rounds, who is in favor of a deal on Obamacare subsidies — believe they can nudge enough Democrats to support their plan if they can convince them that the GOP is truly willing to reach a deal on the other side of a shutdown.

Rounds said he believes he could get 10 or 12 Democrats to agree, but many of them are wary of hanging their own leadership out to dry.

“The problem is they’ve kind of backed themselves into a corner. It’s a matter of, how can they save face without simply being seen as capitulating? I don’t know how they do that now,” Rounds said.

Rounds, like multiple other Republicans in both chambers who support the Affordable Care Act subsidies, were clear though: They will not strike a deal with Democrats until the government is reopened.

“I really do think that the Democrats own this shutdown,” GOP Sen. Thom Tillis of North Carolina said, explaining that he and several other Republicans are open to talks over ACA subsidies and asking Democrats to extend current funding levels through November.

“It’s irrational. On every level, the Democrats are pushing back, and I like to think of myself as a fairly rational person, but they have missed it on this point,” he said, predicting that it would be Democrats who reverse course on their position once Americans see their premiums rise.

One big reason Republicans insist they can’t veer in their position: Setting a precedent for future showdowns over funding. “The fear of many is setting the new precedent of holding federal workers hostage at every CR expiration,” one House GOP member added to CNN.

Vought’s vague threat

Speaking on the House GOP conference call, Vought, the director of the Office of Management and Budget, did not offer clarity on which federal workers could see layoffs or how many people could be affected, sources on the call said. But Vought signaled it would take place within one to two days.

Vought and others in the Trump administration have previously warned that they would use their powers during a shutdown to further shrink the size of the federal government to reflect the White House’s agenda. Even GOP committees, however, have gotten little information about what that means for key federal agencies.

Vought also warned that a popular federal safety net program for mothers and young children – called WIC – will run out of money by next week.

“This is just mafia style blackmail and I don’t think the American people will stand for it,” Sen. Chris Van Hollen of Maryland said of the White House’s overarching threats to federal workers during a shutdown, including mass firings.

Asked about the call Wednesday by CNN’s Kristen Holmes, White House press secretary Karoline Leavitt said Vought was “going to kind of walk them through what this, unfortunately, is going to look like, so they can discuss it with their constituents back home in their respective districts.” She declined to say if any force reductions during the shutdown would be permanent.

“Well, sometimes you have to do things you don’t want to do, and it’s because the Democrats have put us into this position,” Leavitt said. “If the Democrats did not vote to shut down the government, we would not be standing up here talking about layoffs today, we’d be talking about all the other news stories going on in the world in our country.”

Sen. Mark Warner of Virginia, whose state includes a large number of federal workers, said he’s been surprised how many federal workers have been backing Democrats in their fight after Vought and his budget team have “terrorized” the government’s workforce.

“They may be the strongest group yet saying you got to push back. Now, the question will become, will they have that same view three weeks from now? I don’t know,” Warner said.

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CNN’s Ellis Kim, Veronica Stracqualursi, Alison Main and Nicky Robertson contributed to this report.