Lawfare Daily: The Law of the Shutdown

[Intro]

Nick Bednar: The federal workers have some role to play here in how long this goes on, in that those exempt functions, even the functions we view as, you know, clearly within the confines of the Antieficiency Act, the government only continues to perform those functions to the extent that federal workers continue to show up.

Molly Reynolds: It's the Lawfare Podcast. I'm Molly Reynolds, senior fellow at Brookings and contributing editor at Lawfare, with Nick Bednar, associate professor of law at the University of Minnesota and contributing editor at Lawfare, and Sam Berger, senior fellow on the Federal Fiscal Policy team at the Center on Budget and Policy Priorities.

Sam Berger: You can't fire people because you're trying to force another political party to agree to a bill, right. That's not an appropriate reason.

And that's not––that's why when they sort of put out these documents, they don't ever lean on that. But publicly, it's very clear. Russ Vought, the head of OMB, Donald Trump, this is why they're doing it. And they're tweeting that every day.

Molly Reynolds: Today we're talking about the government shutdown and the legal questions related to it.

[Main Episode]

I'd like to start today by discussing, really, why do we get occasional government shutdowns? What is it about the way that Congress allocates federal funds that means that for some things and not others, activities stop running if Congress doesn't act? Sam, do you want to start us off?

Sam Berger: Sure, happy to. So the reason that we have government shutdowns is because there are basically two ways that Congress provides funding. One is that it sort of authorizes a program and then basically lets that program sort of keep running.

So in the absence of Congress taking any action, it just sort of rolls along. That's what we call mandatory funding––not because it's required, but that it basically just sort of happens without any action.

Second set is funding that's provided on an annual basis or sometimes, right, for more than one year, but still kind of re-upped on that sort of yearly basis, which is discretionary funding.

And again, it's not that there's any choice that money has to be spent. One of the issues that we might talk about today is the way in which the administration is refusing, illegally, to spend that money. But it is money that's provided on a regular basis. A good chunk of it is annual. Some of it is two-year, some of it is no-year, but Congress provides it in what are called appropriations bills, which happen every year, and they run right up until the end of September, and October starts a new fiscal year.

And in theory, Congress should pass appropriations bills. In practice, they usually are passing a continuing resolution, which sort of keeps the prior funding levels at a––for a certain period of time until they're able to pass the bills for the entire year.

And what you see in a shutdown is an inability of Congress to provide that funding for the upcoming year. And so, there's a set of funding that folks don't have, and then that's when we have a government shutdown.

Molly Reynolds: Thanks. So Nick, when there is a shutdown, even some of these activities for which there aren't active appropriations, as Sam has just described, even some of these activities continue, what governs the process of deciding what of the things for which money has run out actually keeps operating during a shutdown versus what doesn't?

Nick Bednar: So the Antideficiency Act basically prohibits federal agencies and the federal government from continuing to spend money beyond appropriations. But it has some carveouts for functions that are necessary to protect the physical safety and property of the federal government.

And most of that determination is made by the agencies themselves in cooperation with the Office of Management and Budget and other entities within the executive branch, but there's really an Office of Legal Counsel memo that has kind of set the architecture in place to decide what is considered exempt under the Antideficiency Act.

And so this memo envisions four different exemptions. So one, are employees whose compensation is financed by a resource other than annual appropriations. So going back to what Sam said, we have a bunch of mandatory spending that is not part of this annual appropriations process. Individuals who are funded and their functions are funded through other means continue to work.

Second, we have employees needed to perform activities expressly authorized or implied by law. So, if for some reason there is a statute that is required to be implemented even during the shutdown, those employees continue to work to ensure that function continues.

Third, employees needed to discharge the president's constitutional duties and powers. This is kind of a broad category, and OLC has always been a little trepidatious about allowing presidents to expand it too far, but there's this idea that the presidents have some inherent authority and they have to be able to have personnel to exercise that authority and continue their constitutional duties.

And the appropriations process––if, you know, if these positions went unfunded for too long, it would deprive presidents of that inherent constitutional authority. And finally, employees needed to protect life and property, which is really what the Antideficiency Act envisions. These other categories have been kind of implied or read into it by the Office of Legal Counsel,

Molly Reynolds: So, one thing that we observed during the first Trump administration when we had a long partial shutdown of federal operations.

So last––about 35 days from the end of 2018 to the beginning of 2019 was what past Lawfare Podcast guest Eloise Pasachoff has referred to as some creative lawyering around kind of what was and was not allowed to continue during a shutdown.

Sam or Nick, do you want to talk a little bit about sort of what we saw happen during the first Trump administration in this space and the extent that that might inform anything we expect we might see in this time around? Sam, do you want to go first?

Sam Berger: So, there were multiple shutdowns during the Trump administration, but in the final shutdown––which was the longest one, actually the longest shutdown we've ever had––the Trump administration had concerns about political fallout, and because of those concerns, they tried to make the shutdown as painless as possible.

I think it's important for folks to understand, while there's some amount of discretion that agencies have, that executive branch has, in terms of interpreting some of the kinds of activities that continue, as Nick laid out, there's only so much discretion. And ultimately, there's only so much you can do to make a shutdown less painful, because by its very nature, government does a lot of things. Most of those things have to stop.

And even where the things continue, people aren't getting paid. I think this is a very important thing to remember. They're getting IOUs. There's only so long that people can get IOUs before they have to go find different work that is actually paying them so that they can pay for groceries, pay the rent, all the other things that need to happen.

So what the, but what the Trump administration did was a couple different things. One was an aggressive use of carryover balances, and so one of the areas of discretion that agencies have is they have money that's left over from prior years. And let's say you have money, a hundred million dollars in a pot that could be used for A, B, and C.

Program A doesn't have any appropriations during a shutdown. Well, you can choose if you want to use some of that money for that or use it for B and C when exactly you want to use it within some measure of reason. Here, they were taking a lot of money and in some cases I think their concerns, they were even illegally moving money to a purpose for which it couldn't be spent in order to try and keep things operating.

The second thing is to basically bring folks back for activities that they aren't actually allowed to do during a shutdown. And the, the most egregious example here was around IRS. So they were concerned about people not getting their refunds, and so they said they were going to bring back––and the process of bringing back workers to provide those refunds.

And the reason that, and this is sort of inconsistent with the longstanding view of the executive branch, including the Trump administration, every single time up until they decided they needed to bring these folks back to try and limit the political fallout.

And the reason for that, just in case folks are wondering, you know, for social security, you have payments that are going out on a specific date, certain, and so. The, the program can't operate, or the program is fundamentally damaged if those payments aren't going out when they're supposed to.

Refunds aren't like that. There isn't a very specific moment. You could get to a point where that might be the case, but they were trying to keep everything flowing as normal, which, you're not allowed to do. And so they took this set of steps to try and limit some of the political fallout. And it suggests, I think that, you know––and as we've already seen, I don't think we even have to, it's not conjecture at this point since they're––

You know, this is a, an administration that doesn't speak in subtext. It speaks in, in all-capital texts. You know, that basically they're going to try and manipulate the shutdown as much as possible for political purposes. And here they seem to want to be inflicting as much pain as possible. Back then they were saying they wanted to inflict the least amount of pain possible.

Molly Reynolds: Yeah, I think that's an interesting observation, the sort of fact that a lot of what we're seeing, at least in the––we're recording this on Thursday morning, what we're seeing in the first 24 hours of the shutdown is really this posture towards trying to exert maximum pain, as opposed to relieve political pain.

Nick, I'm curious. How much can the administration do within the confines of the existing OLC memo? And sometimes we call it the Civiletti memo. Can they do a lot without having to maybe throw out the Civiletti memo entirely? You saw some sort of speculation around this question in the run up to the shutdown. What are your thoughts on that?

Nick Bednar: So, you know, a, a couple thoughts. The Civiletti memo and subsequent memos that have followed it, right, they have these broad categories and Eloise Pasachoff wrote this like wonderful book chapter at one point, saying that the interpretation of these categories has always varied by administrations.

So there has always been some amount of political posturing that has been done within these categories. Presidents tend to take the position that the functions they prefer for their own policy reasons are exactly the sort of positions that need to be filled during a shutdown, and the positions and functions they dislike or disfavor are non-essential.

And so there's always been a bit of political gamesmanship here. I completely agree with Sam, though. There's only so much gamesmanship that that memo will allow and the Antideficiency Act will allow, right? We know from the previous shutdown, the Government Accountability Office often conducts a lot of investigations into which functions are performed during the shutdown and whether there have been Antideficiency Act violations.

And the Trump administration committed quite a few Antideficiency Act violations in the 2018-2019 shutdown. I anticipate we're going to see many more of them. It's clear they want to make this process painful for Democrats and people they perceive as antithetical to their policy agenda. At the same time, they are still trying to protect the functions they value.

I mean one sort of indication that we're gonna probably have a lot of investigations and findings of Antideficiency Act violations is the administration has only furloughed 23% of the federal workforce, which is the smallest number in any shutdown. So you have to sort of wonder, right, who they're retaining this time, and you can pull all sorts of graphs that show that, right?

So we know for a fact that the Environmental Protection Agency Administration is laying off more than 90% of its workforce. VA is only laying off about 3%. Treasury also has a very low percentage this time around. So we're still seeing a lot of manipulating of what those categories are. Can they legally do that?

I don't know. Right. Like there is some gamesmanship that is permissible in interpreting what that memo means. I think they've probably clearly overstepped it by quite a bit. It's going to take until we see what is actually performed and how long this goes to know the extent of the violations. But yeah.

Sam Berger: And if I could, just to follow what Nick said, I mean, I think there are a couple of important guardrails that really limit the ability here

And the most important one was the one I said at the beginning, which is, this is all IOUs. All these excepted activities, everything that's happening, there's no actual money that's going out the door, just a promise that money will go out the door. And that works for a little while until it doesn't. And that's a major driving factor here.

Second thing is that they don't get to make determinations for Congress or the judiciary. They each––both of those branches will make their own determinations. They've already said that they'll continue their constitutional functions. Judiciary’s actually never shut down because of carryover balances. And we'll see if this extends long enough that that will happen.

But they said, and if it does, they'll keep hearing cases. Obviously crimes are still there at each. Typically each member makes a determination about who the staff in their own office who are excepted and will continue for their constitutional functions. And so there are some real limitations even as there, you know, is some difference.

I think the other thing that's making––I just note an apples-to-apples comparison a little bit harder is because of the significant reduction in federal employees writ large, sort of percentages of who's accepted, exactly, can just be a little bit challenging to see. And the last thing I'll just say is at least again with the caveat is that we're taping this Thursday morning.

A lot of things that we've seen to cause pain are wholly outside of the shutdown, right? That it's less about manipulating the shutdown to date and more about canceling funding that is unrelated to this, or holding up funding that is unrelated to this.

And in some cases, things that they seem to have been doing over the whole course, and in fact, one of the reasons we're actually in a shutdown now is because of these abuses of authority with respect to the use of funding. So again, just––I think that they're absolutely trying to exact maximal pain, but so far a lot of what they're trying to do seems to be outside of the confines of the shutdown as opposed to within the context of the shutdown.

Nick Bednar: If I could just add one addition to Sam's point about, this is all IOUs and Congress and the judiciary have power. The other folks who have power here are the federal employees who are exempted. So again, as Sam said, these are individuals who have to pay groceries, they have to pay bills, they have to pay their mortgages.

And at some point it becomes untenable to continue to show up to work every day without a paycheck. So, last shutdown, the 2018-2019 shutdown, we had a lot of delays at some of the major airports like LaGuardia because air traffic controllers, around that 30-day mark, started calling in sick more frequently.

And so the federal workers have some role to play here in how long this goes on in that. Those exempt functions, even the functions we view, as you know, clearly within the confines of the Antideficiency Act, the government only continues to perform those functions to the extent that federal workers continue to show up.

Sam Berger: Yeah, and the––and just on that to, just so folks are tracking this as well, when you––the reason Nick was talking about that 30 day mark is what you tend to see is, you know, if you think about your own paycheck, you're always being paid for work that you've done previously. So, typically you would say the first paycheck that federal workers get, depending on exactly when the timing is, is a full two weeks of work that was done prior to the shutdown.

And then they may get a week, the next one is either a week or even a portion of that week. And then when you start hitting 30 days, then there's nothing. And so that's one of the, the driving––and remember, you know, obviously there's a lot of rhetoric, ‘well, the Trump administration doesn't care at all about government’––and, well, I shouldn't say that's just rhetoric. Obviously there are a whole range of steps they've taken to that.

But when you think about what the federal government does, Bureau of Prisons, FBI, national security, troops, there are lots of folks here that just have to be showing up. Like, society cannot function if these roles are not played. Air traffic controllers, you know?

And so while it's certainly the case that they may try and reduce activities and programs they don't like, it's not the case that they'll just sort of walk away from government as a whole, because you can't really do that. You need the government to operate. And even Republicans agree with that.

Molly Reynolds: So there's a second set of questions about federal personnel that are being presented by this particular shutdowns.

In some important ways, a lot of what we've been talking about already about who is excepted and who is not excepted and what functions are excepted and what functions aren't, we had to tackle those during previous shutdowns. We've talked a lot about the 2018-2019 one. There was one a long one in 2013. There are the ones during the Clinton administration.

But there's something new happening this time around threats from the Office of Management and Budget to use this year's lapse in appropriations to execute additional large reductions in force across federal agencies beyond what we've already seen over the course of this year. So Sam, do you want to start us off by talking a little bit about this memo that OMB sent last week, kind of articulating this plan?

Sam Berger: Yeah, sure. So OMB put out, I think, a fairly bizarre and obvious threat, right? In which the, the argument goes something like what we previously told you when you're thinking about––and so one thing to recognize is this has been ongoing, right?

They have a whole process in which they're trying to significantly reduce federal personnel, and they have been taking steps along those lines this whole time. One of the factors that they said to consider is whether there's an express statutory requirement that an activity continue and their argument is, oh, look, during a shutdown, nothing is authorized, and so anyone can be fired.

If that sounds to you like a very odd argument that's sort of inconsistent with logic or fact, then you are correctly following their argument as they have put it forward. And so what they said is you can now consider RIFs of anyone. And the criteria that you should use, is if a program is inconsistent with or is not funded by the reconciliation bill that was recently passed, and so that's money that's outside the appropriations process and it's inconsistent with the administration priorities, then you should consider RIFs of everyone, both excepted and non- excepted.

Because remember, this is wholly separate from the shutdown itself. It's just using it as an excuse to try and fire people. And that's basically what the, the memo encouraged agencies, to consider putting forward these RIFs.

Molly Reynolds: This is not the first time this year that the Trump administration has sort of sought to link this concept of what happens under a shutdown and the justification for reductions in force.

There was another, I believe, executive order back in the spring. Lawfare ran a piece from Bridget Dooling at that point that we'll link to in the show notes that also sort of explains that––as you just said, Sam––concept of what's excepted and not excepted under a shutdown, and the concepts under the reduction in force regulations are not entirely overlapping and are in fact pretty distinct from one another.

So both of you have written recently, and we’ll link to your pieces, about the question of whether a shutdown kind of provides a bona fide reason for conducting a RIF under federal employment law. Nick, I'm gonna come to you first for your thoughts on that question, and then I'll turn to Sam as well.

Nick Bednar: Yeah. So, before we get like really far in the weeds, I wanna set out three pieces to this puzzle. So I think there are three questions you have to answer and all of them have to be true for them to be allowed to do RIFs.

One is, under the civil service laws, would a lapse in appropriations be considered a bona fide justification for initiating a RIF? Another is, even if it is, can they perform RIF planning as an excepted function under the Antideficiency Act?

And the third is, even if they do all of this, suppose it's something they can do under the Antideficiency Act and something they can do under the Civil Service Reform Act, are they going to do it properly? And what are the consequences of trying to do all of this anyway?

So I think those are the three pieces of the puzzle, and it's kind of important to distinguish between which one you're talking about at any given point. So the first part of the puzzle is what would a court do with the civil service laws?

So most courts defer to the Office of Personnel Management's regulations as to when a RIF is justified. And the regulations say an agency may initiate a RIF for purposes of overcoming a shortage of funds.

There's a bunch of case law from both the Merit Systems Protection Board and the Federal Circuit that has given substantial discretion for agencies to determine when they are experiencing a shortage of funds or about to experience a shortage of funds.

So the Federal Circuit has said that conducting a RIF because of an anticipated shortage of funds does not require the shortage to exist at the time of the RIF. There is no reason for agency officials who are aware of imminent legislation progressing through Congress to wait until the legislation is enacted before taking appropriate action.

The Merit Systems Protection Board has upheld RIFs when Congress has increased appropriations and when Congress has even passed continuing resolutions after the RIF, saying, ‘don't furlough employees,’ and the MSPB has taken the position that RIFs and furloughs are different. Unless Congress explicitly says no RIFs, this is going to be fine.

So I think a court examining this under the current precedent, and I'll just say like, personally, I think courts have way too expansive of understanding of when RIFs are permitted under law. Like I, I don't think the current statutes and regulations support a lot of the MSPB's case law.

But I think a court would defer to that determination under the civil service laws that a RIF is permissible, due to both the lapse in appropriations that results from the shutdown, but also the anticipation of budgets result after the conclusion of the shutdown.

Molly Reynolds: So I wanted to give Sam a chance to come in on the first of Nick's questions and then we'll come back to the second two later. So, Sam, what are your thoughts on this?

Sam Berger: Well, yeah, I think first I do want to emphasize areas where Nick and I, I think, are strongly in agreement, although Nick should of course jump in if I am mischaracterizing that.

But I think we both agree first of all, that there's no need for these RIFs. There's no legal need, there's no policy need, there's no management need. These are solely discretionary.

Molly Reynolds: If you're not watching us on video, Nick is nodding vigorously.

Sam Berger: And you know, the, the only purpose for these, there's a political threat in order to try and force Democrats in Congress to sign on to the administration's preferred funding bill.

Second, I think Nick and I agree that there isn't actually a legal justification that's provided here under law, meaning the temporary lack of funding––and that's what a shutdown is, remember, most shutdowns last a couple days, the longest one that has ever lasted 35 days, a little bit more than a month––when you think about the timescale for RIFs, RIFs are permanent changes to deal with permanent changes, a reorganization or permanent lack of funding, in essence, right. And the timescale suggests that normally you give folks 60 days’ notice. In unexpected circumstances, you give them 30 days’ notice.

That's longer than basically any shutdown would ever happen. It's sort of akin to, I give a shutdown happened and agents saying, oh, we gotta sell off our buildings. Just sort of like get rid of them because I don't know, does Congress want us to have buildings? And folks who are not watching, see that Molly and Nick are both laughing, as you should be?

Because that's absurd, right? And this argument is equally absurd. Oh, who knows what Congress is going to do? Maybe they no longer want us to inspect food and drugs and medical products to make sure they're safe. If that sounds absurd to you, then you believe that the reasoning of the Trump administration is absurd and you're correct.

So I think we're all on the same page there. The question just is what do courts do in response. And you know, I think that's a tough one. I think Nick would agree with me only in the sense that these are sort of unprecedented actions. There's a presumption of good faith that the government has, that I think, sadly, we're seeing is not a presumption you can give to the current administration.

As courts walk through that process and as certain courts make different determinations about how they walk through that process, it can be challenging to figure out exactly what will in, in the court. And I also think it's, it's fair to say that you have a Supreme Court that is bent over backwards to avoid ever confronting illegality by this administration, by finding sort of legalistic or procedural reasons that, while what they're doing is illegal, ‘you can't challenge it here,’ or ‘this person needs to do this thing,’ or ‘here's 87 more steps,’ right?

Always kicking the can down the road. And so I think that it, it is a challenging question on what a court would actually do in these circumstances. And if a district court did look at this––because again, this isn't like some very hard-to-piece-together thing. They're all-caps posts from Donald Trump that basically say, really excited to abuse my authority in this situation to punish Democrats during a shutdown.

It is a little bit different than that, but basically, right, you know, that's basically capturing the sentiment and so there's a lot of evidence that what's going on here is an impermissible reason.

So I think we would all agree. Also––and Nick, you should of course step in if you––you can't fire people because you're trying to force another political party to agree to a bill. Right? That's not an appropriate reason.

And that's not––that's why when they sort of put out these documents, they don't ever lean on that. But publicly, it's very clear. Russ Vought, the head of OMB, Donald Trump, this is why they're doing it, and they're tweeting that every day.

So anyway, I think that there are a lot of things that we broadly agree on. I think that we may have different senses of how courts would react, but I think that in that sense, we're both kind of making guesses about what's an unprecedented circumstance. Because, you know, no one has ever tried to use a shutdown to undermine basic functions that sort of Americans on until the Trump administration.

Nick Bednar: If I can just add like a couple things. I, I think Sam's absolutely right here. And I, I wanna emphasize a couple things Sam said, one of which is like, this––like what we're talking about is what would a court do as a matter of law.

As a policy and political matter, none of this makes any sense. Because at the end of the day, right, Congress will restore funding to the government, and you will need federal employees to implement the law. So we are talking about, you know, like a very narrow kind of court-centric question of what a court would do.

Politically, this makes no sense. OMB thinks that it is giving them leverage in budget negotiations, but all this memo really does is says we are going to continue to do the same exact thing we have been doing for the last nine months, which is continue to RIF the same people we told you we were gonna RIF at the beginning of the administration.

And so I don't know what leverage this is giving them. To Sam's point about kind of like the––is this pretext for something else? I think it's absolutely pretext, right? This is clearly, ‘we're gonna fire the people we dislike because, you know, we can, and we're gonna punish the Democrats for not going along with this.’

I'm slightly more pessimistic about what a court would do with that evidence, once it is given a particular RIF to examine. And that's just because of how the burden of proof works in these cases, which is, as soon as the agency is able to establish a bona fide reason, MSPB won't question it.

The other individual is able to––like, the applicant in the case is allowed to present evidence of pretext, but often courts have been reticent––or, and the MSPB has been reticent to take broad political statements about the disfavoring of a particular agency as evidence of political animus.

It is typically the case that when these cases succeed at the MSPB, there are reasons to believe this individual was targeted. And so I don't know what a court does in this situation. I mean, you know, the unions have filed a case to challenge this. They filed in the Northern District of California, and the Northern District of California has been the most aggressive at preventing the Trump administration from pursuing a lot of these actions.

I don't know, once you get to the Supreme Court, if they will say the Trump administration has overstepped its boundaries.

Molly Reynolds: So, we're going to get to some of these sort of bigger contextual questions about what's happening that, that Nick just introduced in a second. But I do want to make sure we have time to talk about Nick's second two questions.

So, Nick, you also raised the issue of, do federal agencies have the authority to engage in sort of planning and executing RIFs, which is not necessarily sort of straightforward or simple process? Nick has an excellent long explainer on the RIF regulations and how they work that we ran on Lawfare earlier this year.

Can agencies actually do all of that work during a lapse in appropriations? Or, to kind of put a finer point on it, like, is that an excepted function under the sort of laws and the government's standing interpretations of them?

Sam Berger: So, I think, again, here's a place where Nick and I very much agree, which is that there's no justification for continuing these activities during a shutdown.

And if you think about the kinds of things that continue––again, folks continue to show up at federal prisons, air traffic controllers, law enforcement, the military, but even some things that we would consider quite critical and important for life and safety, but aren't an imminent threat, can be paused. Important inspections of facilities, of products, et cetera.

If they're not, there's not an imminent threat. Those do get paused. And so the notion that all of these things have to stop, he one thing that needs to continue is working on a RIF––I mean, there's no, and, and I'll say they haven't provided any justification.

There was just a late night, Sunday night guidance from OPM that basically said, we've been alerted by OMB that this is an excepted activity, but I haven't found anyone that's put forward any argument for which of the exceptions it would fall under, nor is it clear which one it possibly could.

So this is a circumstance where––and this is something in the run-up to the shutdown is one of the reasons I heard it actually be harder to fire people during a shutdown because you can't actually do the work.

HR departments don't have funding. Those folks have to go home. You can't keep them there. So I don't think that there's any basis. I also just say it's, it's interesting the OPM guidance on this topic seems to assume that the same Sunday night that a lot of the work is done beforehand.

I think for that very reason, that basically like everyone gets that this really isn't legal. And what you would have to do is try and set everything up for your RIF before it started, 'cause you couldn't really do the work there. But OMB has claimed that they can't. But Nick, you should––of course.

Nick Bednar: Yeah. So, couple things. So one of the reasons it has to be set up in advance is that you can't change the competitive level, which sets who can be RIFed. It has to be set 90 days before. And I have no doubt that determining the competitive level would not be, like, like that's not accepted. Right?

I think it's probably the case that there are some HR functions in some agencies that might be permissible. But it's not like, to be clear, the question of the Antideficiency Act is not, ‘is this person excepted,’ it’s ‘are certain functions they perform excepted?’ Which means there are some people who will perform certain functions, but will not perform everything they would do if the government was fully funded. Right?

So, it can be the case that there might be a few HR managers in the building who normally could write a RIF notice, but who can't do so and are instead, you know, managing leave for the exempted employees, or doing other things that might be necessary to manage the workforce who remains and to set up furlough. Right?

So probably some HR functions are permissible. I think the best evidence that this is not permissible is that it has historically never happened.

So, shutdowns have happened for about 50 years now. There's like some weird history we can go into as to why shutdowns didn't happen in the past. But no agency ever looked at a shutdown and said, ‘geez, now we have to fire everyone permanently.’

Administrative furloughs have always been the way we perceived––so the idea that RIF planning is a necessary function that has to be performed just isn't true. Again, I mean, this kind of goes back to the question of what's the argument the administration is going to make before court? I don't know, in part because of, what Sam said, is I haven't seen the argument.

Like, I can come up with some theories of what they might say, and I can imagine some judges who'd be persuaded by that just based on the amount of discretion we afford the executive branch in managing personnel. But I think any plain reading of the Antideficiency Act and looking at how shutdowns have been historically managed would suggest that, no, this isn't an exempted function.

Molly Reynolds: Yeah, just to underline a point that Nick was making, I think for example, this is how a lot of timekeepers in federal offices work.

Which is that they are non-excepted for all but the last day of the pay period because that is the day on, which, Nick pointed out, you have to do things like manage the leave for the excepted employees and that sort of thing.

And so I think that's a really nice example of this, again, this notion that it's the functions that are excepted or not excepted and not the personnel. And when we're talking about RIFs, we are really talking about individual positions. And importantly, again, as one of the things, many things I've learned from Nick this year, we talk about positions and not necessarily––that's the unit of analysis.

And then you start to figure out kind of where individuals fit into those positions. But that's what you're starting with when you're really thinking about RIFs in the proper way.

Which brings us to Nick's last question. And Nick, I'll come to you first on this one. Will the federal government in this case follow the proper RIF procedures? Do we have any reason to think that that's what would happen?

Nick Bednar: No.

So, okay, several things. One, we know they've already sent RIF notices, so patent and trademark office I think RIFed a hundred, 140 people last night. So we know it's happening, right?

The question is, are they going to follow the proper procedures? So one thing to keep in mind is every RIF has two components. You need a justification, and you have to follow the most complicated set of procedures you have ever looked at in your life. Most people don't challenge the justification, because as I talked about, usually the federal government is able to articulate some reason under OPMs regulations that it is justified in performing a RIF at this particular time.

Where almost all of the fights and RIFs happen is on the procedures. You have to provide people with sufficient notice. You have to put them in these, like, little weird groups to determine who gets RIFed first and who gets RIFed last.

And then you have to do something called bumping and retreating, which is those people who you are removing from their positions, you have to move to a different position if they're eligible for a different position.

And so this is an incredibly complicated process. The government has a really historically bad record of performing personnel functions during shutdowns, and I can't imagine they are going to successfully perform one of the most complicated personnel functions you can do in a shutdown setting.

The other thing I will add about all of this is the following, which is like the weird situation they are setting themselves up for even if they RIF all these people. Okay, so individuals who are removed as a result of a RIF have reinstatement rights or reemployment rights.

So if the government removes all these people and then Congress appropriates all this money and the government says, ‘geez, what do you know? It turns out we need a bunch of people because now we have a bunch of money,’ the people have who have to be notified first are the people they just RIFed, because they have a right to apply back for those positions. Now you can imagine what the government or the executive branch thinks it's about to do is say, oh, we're just not going to hire those people back.

But now we have an impoundment issue––of, you have a bunch of money that has been appropriated for salaries to implement all these functions. There is no one to implement all of these functions. And so the executive branch is caught between, do we want to hire back all these people and comply with the Impoundment Control Act? Or do we want to be taken to task for having engaged in all of these impoundments?

And so this whole situation, even if they can successfully do it, suppose they just like a court upholds procedurally everything that's happened. It's nuts because the policy outcome at this––they don't get what they want. They just look like they did a really stupid thing to begin with.

Molly Reynolds: Sam, anything to add?

Sam Berger: No, I mean, I think that that covers all the issue––I do think one thing that is sort of implicit in what Nick is saying, but just to make sure viewers are following, you know, people talk about getting RIFed, but because of these notices, it's not like those folks are actually fired the day that they receive a RIF notice.

And so again, when you're talking about 30, or in the guidance that OPM just put out, they said in most cases it was going to be 60 days. Well, the shutdown is going to be resolved before then, so the funding will already be there. And of course then that opens up the question of, you know. Congress simply in any subsequent legislation that has passed, undoing the RIFs, which it easily could, and would seem to be a sensible way, as opposed to forcing what Nick is talking about, where everyone is let go and then the next day they all come back.

Well, they have to go through a process of bringing them back. So yeah, it, it is again––this is, the no sound management or policy reason. In addition to there being no legal reason for doing so.

Molly Reynolds: All right, before we zoom out I want to take up one specific sort of related question that is around how the administration is behaving in the first 24 hours of the shutdown.

So, Nick, tell us a little bit about what we've been seeing in terms of federal agencies putting up notices on their websites about what is going on what some federal employees are finding in their out-of-office email responses. Talk a little bit about that for us.

Nick Bednar: So this all sort of started, I think the day before the shutdown, the Department of Housing and Urban Development put up this big red banner on the front page of its website that said something to the effect of like, blame the Democrats for not supporting the bill.

The shutdown happens and all federal employees––or to the best of my knowledge, all federal employees––receive this email that said, set an office or out of office email and include this line that is quote, unfortunately, democratic senators are blocking passage of HR 5371, the appropriations bill in the Senate, which has led to a lapse in appropriations.

Now, the Hatch Act prohibits federal employees from engaging in political activity. And Service Reform Act prohibits federal agencies from coercing their employees from engaging in political activity. And this is pretty blatant political activity. So federal employees were sort of like, I don't think I should make a partisan statement on my email. Which is the correct response.

The administration, or at least some agencies––I know the Department of Education has done this––has taken this into their own hands, and they have just changed all the office out of office emails for their employees to include this sentence. So now every time you email a Department of Education employee who is currently out of the office, you get this statement blaming the Democrats for failing to vote for the shutdown.

And then my friends who are in the federal workforce and have been emailing themselves to find out has theirs been changed. It seems to not be consistent across all agencies, but, yeah. So everything's just a Hatch Act violation right now.

Molly Reynolds: So now I'd like to zoom out and put sort of this nascent shutdown in some broader context. Sam, how should we think about what we are seeing already in light of the broader agenda of Russ Vought as the OMB director during this administration? Kind of, how would you contextualize it?

Sam Berger: But I think we're seeing––why there's such a need for Congress to have protections in any full year funding bill to stop these sorts of abuses of power.

And what we've seen is an administration that's untethered from the law, untethered from policy objectives that would benefit the American people, untethered from management objectives that ensure the government is operating as it should, and are focused on trying to abuse their power to advance partisan goals, hurt their enemies, help their friends. It's anathema to our American system.

And so, part of the reason that we have, currently, a shutdown is the Trump administration doesn't want to agree to provisions that limit its ability to misuse funding, to impound it, to rescind it unilaterally in violation of the Constitution and the law. And what we're seeing right now is why those protections are so desperately needed.

So, part of the concern here, the healthcare crisis that's being created by Reconciliation Bill, but a huge aspect of this is it is very hard to reach any sort of deal where one side says, just so we keep in mind though, I'm going to break this deal whenever I want, for any reason or for no reason, and there's nothing you can do about it.

And so, you know, I just think this is further evidence of why it's important––and it's important for Republicans in Congress, right? These are commonsense things. President doesn't get to make law on his or her own. You have to spend money that Congress agrees on. A deal is a deal. If you can't agree on this, you can't really agree on anything.

And so I think that these sorts of actions just make all too clear the real need for enforceable protections in enforceable provisions in any full-year funding bill.

Molly Reynolds: So, before I turn to Nick, I just really want to underline something Sam just said about the consequences of the administration's efforts to intrude on Congress's power of the purse for the broader legislative process. Which is to say that it's both about, if you don't think a deal is going to stick, how do you, agree to one in the first place?

But increasingly, and, you know, this is not the greatest thing in the world, but it's the world that we live in, the appropriations process, particularly these big year-end bills, have come to bear more and more of Congress's lawmaking generally. So if we take off the table––because it is impossible to get a deal that you don't have reason to believe the executive branch is going to implement––if you take off the table the appropriations process as one way for getting things done, that takes a huge train out of circulation for accomplishing things in Congress generally. So this is, this is a, this is a problem for Congress's institutional power. It's a problem for the power of the executive branch, and also it's a problem for Congress's own adaptations to getting things done in the current environment. Nick, what are your thoughts on sort of this broader contextual question?

Nick Bednar: So, I want echo something Sam said and, and you just said, Molly, which is for me, I think all of this situation demonstrates how much of administration and in the executive branch was governed by norms for a very, very long time.

So, for a long time, what we assumed was that the president and his advisors would engage within kind of a realm of good-faith management. We might disagree about precisely what that looks like or how the president should manage the executive branch, but we typically deferred very, very heavily to the executive branch.

And when Congress enacted the Civil Service Reform Act, it gave the president a lot of authority to set regulations and determine who should be removed and various things. I shouldn't have to write a Lawfare article highlighting hey, this really bad policy consequence might be upheld by the courts, and Congress has the power to legislate either in this appropriations bill or outside of this appropriations bill to hold the president accountable.

In the past, it has done things like set personnel floors. It is said you have to notify us 90 days before you undergo a reorganization or remove any employees. It has said you cannot use any of this money to remove employees. Congress should really use this as an opportunity to check the executive branch and prevent this sort of deconstruction.

Now internally, back to kind of Russ Vought and his plan, it is very clear that Russ Vought wants to centralize a lot of government functions within OMB. That is consistent with the Trump administration's efforts in the first administration.

So, in the first administration, the Trump administration proposed merging Office of Personnel management, which is like the big HR department of the government, into General Services Administration, but transferring all personnel policy, making operations, to the Office of Management and Budget.

And I think that's a lot of what we're seeing here. So, if you look at like a lot of the memos coming out of the executive branch related to personnel. A lot of them are driven by Vought in the Office of Management and Budget. OPM is releasing memos, but a lot of the kind of big overarching issues regarding RIFs have come from OMB.

And so I think Russ Vought is using this as an opportunity to further consolidate power and assert himself as the predominant figure when it comes to resource distribution and human capital policy in the executive branch.

Sam Berger: One other thing I would just say is, this is part, I think, of a broader trend in which the administration is proving itself to be an unreliable partner across a range of circumstances.

If you think about one of the things that's made our country so successful, it's the trust that has been painstakingly built over generations that the federal government is going to do what it says, that it's going to be a reliable partner––whether that be on the international sphere, whether that be in terms of the relationship with grantees and contractors, the relationship with the courts where there's a presumption of regularity that the government is going to follow the rules.

And not just follow the law, but actually play by the word, the spirit––follow the spirit in addition to the letter of the law. And also in engagements with Congress that when a deal is struck, both folks are going to stand up to that deal.

And what we've seen, in place after place after place, is the administration setting that credibility on fire, destroying all of that goodwill that has been built up, again, painstakingly over generations, person after person, after person, doing the right thing, doing the honorable thing, doing the responsible thing.

And now we're just seeing them and again and again and again, whether it's cheating grantees out of funding that they're supposed to get, refusing to be a good actor when it comes to the international stage, refusing to stick by the deal set with Congress, and, in some cases, making blatant misrepresentations to the court, that's going to have real consequences. Not just for this administration, but going forward.

And so I view this as a, a larger issue about just the destruction of the credibility of the executive branch for no reason. And really at the behest of just President Trump and his senior advisors who are making choice after choice after choice to destroy that credibility.

Molly Reynolds: All right. Sam, Nick, we have to leave it there for today. Thank you so much for joining me.

Nick Bednar: Thank you so much for having us. Thanks, Molly.

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