WASHINGTON – The federal government entered a shutdown Wednesday with no clear path to resolution, as President Donald Trump’s administration froze $26 billion earmarked for Democratic-leaning states and warned of mass layoffs if the standoff persists.
The funding freeze targeted $18 billion for transit projects in New York, home to Congress’s top Democrats, and $8 billion for green-energy programs in 16 Democratic-run states, including California and Illinois. The move followed Trump’s pledge to use the shutdown to pressure political opponents and tighten his control over the $7 trillion federal budget.
Vice President JD Vance said at a White House briefing that the administration could be forced to move beyond furloughs and enact permanent layoffs if the shutdown drags on, adding to the 300,000 federal workers already slated for dismissal by the end of December. The U.S. Patent and Trademark Office separately confirmed that it would cut 1% of its 14,000 employees.
Overall, some 750,000 federal employees have been ordered to stay home, while others, such as troops, Border Patrol agents, and some Homeland Security staff, continue working without pay. Agencies, including the Department of Veterans Affairs, said burials at national cemeteries would proceed, but headstone installation and groundskeeping would stop. Smithsonian museums are expected to remain open through Monday, while national parks face pressure to close amid safety and staffing concerns.
Democrats condemned the White House’s decision to freeze infrastructure and clean-energy funds. House Minority Leader Hakeem Jeffries said cuts to New York projects would cost “thousands of jobs,” while Senate Majority Leader Chuck Schumer accused Trump of “using the American people as pawns, threatening pain on the country as blackmail.”
Republicans expressed mixed views. Senator Thom Tillis cautioned that withholding funds could make it harder for Congress to end the shutdown. Senate Republican Leader John Thune dismissed the criticism, saying, “Well, vote to open up the government and that issue goes away, right? I mean, it’s pretty straightforward.”
The shutdown is the 15th since 1981 and the third under Trump. It comes as Democrats demand the renewal of expiring health care subsidies under the Affordable Care Act, calling it a “moral issue” affecting millions of Americans facing rising insurance premiums. Republicans have resisted tying the subsidies to budget negotiations, though some have floated possible extensions outside of shutdown talks.
Both chambers of Congress failed to pass stopgap measures this week. The Senate rejected a Republican bill funding the government through November 21 and a Democratic plan that paired government spending with health care support. Republicans, who hold a 53-47 majority in the chamber, need at least seven Democratic votes to clear the 60-vote threshold for spending bills.
Tensions have been inflamed by Trump’s combative approach. At a meeting with congressional leaders, he handed out “Trump 2028” caps and later shared a widely criticized video mocking Democratic figures. In a joint statement, Schumer and Jeffries said, “President Trump’s behavior has become more erratic and unhinged. Instead of negotiating a bipartisan agreement in good faith, he is obsessively posting crazed deepfake videos.”
Meanwhile, the White House’s Office of Management and Budget instructed agencies to prepare not only for furloughs but also layoffs, an unusual step in past shutdowns. The directive has fueled fears of long-term damage to government operations and ripple effects across the economy.
Wall Street opened lower on Wednesday but later rallied to fresh highs, reflecting investor uncertainty about the shutdown’s impact. Economists warn that prolonged disruption could slow economic growth, particularly if federal contracts, health services, and benefit payments are delayed.
The current standoff echoes past funding battles. The longest shutdown in U.S. history lasted 35 days in 2018–2019 during Trump’s first term, sparked by his demands for border wall funding. In 2013, the government shut down for 16 days under President Barack Obama over Republican efforts to repeal the Affordable Care Act.
With no new negotiations scheduled, lawmakers on both sides continue to blame each other while bracing for a prolonged standoff. “Clearly, they wanted to shut the government down,” Jeffries said in a CNN interview.
Edgardo Hernal started college at UP Diliman and received his BA in Economics from San Sebastian College, Manila, and Masters in Information Systems Management from Keller Graduate School of Management of DeVry University in Oak Brook, IL. He has 25 years of copy editing and management experience at Thomson West, a subsidiary of Thomson Reuters.
- EDGARDO HERNAL
- EDGARDO HERNAL
- EDGARDO HERNAL
- EDGARDO HERNAL
