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2025.10.16 14:15 GMT+8

Judge blocks Trump's layoff plan as U.S. shutdown enters third week, widening economic fallout

Updated 2025.10.16 14:15 GMT+8
CGTN

With the government shutdown now in its third week, a sign turns away tourists at the entrance to the Capitol Visitor Center, in Washington, the United States, October 15, 2025. /VCG

A federal judge on Wednesday blocked the Trump administration from laying off thousands of federal workers during the government shutdown, saying the move appeared to be politically motivated.

The decision came as the U.S. federal government shutdown entered its third week, rippling across industries from aviation and tourism to real estate and food assistance.

U.S. District Judge Susan Illston of California said that the administration had failed to follow legal procedures for workforce reductions and that officials have exceeded their authorities. The judge also cited public statements by President Donald Trump, Vice President JD Vance and budget director Russ Vought suggesting that the layoffs appear to be unlawfully targeted at Democrats.

The shutdown, now in its third week, has left more than 13,000 air traffic controllers and 50,000 Transportation Security Administration officers working on a partial paycheck in recent days and they will not get paid later this month if the standoff is not resolved.

This has led to mounting sick calls and thousands of flight delays nationwide. Aviation groups have warned that the situation poses growing safety risks.

"I think it'll really hit ahead, probably about a week and a half from now, when that first zero paycheck comes," Chris Sununu, CEO of Airlines for America, said in an interview, adding that "Most people can survive a couple but after three weeks, that just puts real strain on the system."

Beyond aviation, the closures of museums, zoos and major tourist attractions in Washington, D.C., have disappointed visitors, while uncertainty has rippled through the housing market. A Redfin report found that 17 percent of Americans have delayed major purchases such as homes and cars.

Redfin Chief Economist Daryl Fairweather said rental prices could rise as more people stay in the rental market. "But declining affordability will also be a problem," she added.

Meanwhile, about 7 million low-income Americans relying on the Special Supplemental Nutrition Program for Women, Infants, and Children risk losing access to food assistance as funding is running out. Food bank workers say they are seeing many first-time visitors seeking help in recent days.

Treasury Secretary Scott Bessent said on Wednesday that the shutdown is costing the U.S. economy around $15 billion per day in lost output. "The shutdown is starting to cut into the muscle of the U.S. economy," he warned, urging Congress to reach an agreement soon.

(With input from agencies)

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