Washington: The White House escalated the government shutdown confrontation on Wednesday, freezing $26 billion in funds destined for Democratic-led states. The move, which critics described as a political punishment, marked one of the most aggressive steps yet by President Donald Trump’s administration in using the crisis to assert leverage over Congress.
According to officials, the frozen funds include $18 billion earmarked for New York transit projects home to Senate Majority Leader Chuck Schumer and House Democratic Leader Hakeem Jeffries as well as $8 billion for green-energy initiatives in 16 Democratic-run states, among them California and Illinois.
Vice President JD Vance added to the uncertainty, warning that the administration could broaden layoffs across federal agencies if the shutdown extends beyond a few days. “Billions of dollars can be saved,” Trump wrote on his platform Truth Social, signaling his intention to use the shutdown as a tool for budget control and political influence.
This marks the 15th government shutdown since 1981, halting a wide swath of federal functions. Scientific research, environmental cleanup operations, and financial oversight were suspended, while 750,000 federal employees were furloughed. Others, such as military personnel and Border Patrol agents, continued to work without pay.
The Department of Veterans Affairs confirmed it would maintain burials at national cemeteries but said headstones would not be erected and routine maintenance like lawn care would cease. In a notable break from past shutdowns, the administration also floated the possibility of permanent layoffs, with 300,000 workers potentially losing their jobs by year’s end.
Even the U.S. Patent and Trademark Office reported plans to dismiss 1% of its workforce around 140 employees according to an internal memo.
The decision to freeze funds for Democratic states sparked immediate outrage on Capitol Hill. House Leader Jeffries warned that withholding infrastructure money in New York would jeopardize thousands of jobs.
Schumer was sharper, accusing Trump of treating ordinary Americans as pawns. “He is holding the nation hostage, using pain and disruption as blackmail,” Schumer said.
Republican lawmakers themselves voiced unease. Senator Thom Tillis of North Carolina cautioned that targeting infrastructure funds might deepen the political deadlock and complicate efforts to reopen the government. Still, Republican Senate Leader John Thune dismissed the criticism, saying, “Vote to reopen the government and the issue disappears. It’s that simple.”
Meanwhile, the Senate once again failed to advance two competing proposals: a Republican bill to keep agencies running through late November and a Democratic plan tying funding to expanded health benefits. With a 53-47 majority, Republicans need at least seven Democrats to cross over to clear the 60-vote threshold, but deep partisan mistrust has stalled progress.
At the heart of the funding dispute is $1.7 trillion to cover agency operations, about one-quarter of the total $7 trillion federal budget. The rest is consumed by health programs, retirement benefits, and interest payments on the soaring $37.5 trillion national debt.
Some Democrats, like Senator Tim Kaine of Virginia, signaled willingness to negotiate. Representing thousands of federal employees in the Washington region, Kaine said, “I want Republicans to commit to working with us on healthcare. That doesn’t mean every detail must be finalized, but we need good faith.”
Both parties are already maneuvering for political advantage ahead of the 2026 midterm elections. Democrats argue that Republicans, in full control of Washington, bear sole responsibility for the shutdown. Republicans counter that Democrats are obstructing progress out of partisan hostility toward Trump.
The dispute has spilled into federal agencies, with some government websites posting statements blaming the “radical left” for the shutdown a move that may run afoul of the Hatch Act, which restricts partisan political messaging by federal offices.
The standoff has revived memories of the record-long 35-day shutdown of 2018–19, which ended only after air traffic disruptions threatened to paralyze the nation’s airports. Observers warn that if the current crisis continues, similar disruptions could again become the tipping point.