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White House Withholds $26 Bn from Democratic-Led States Amid Shutdown Fight

Trump’s administration froze $26 billion for Democratic-led states as the U.S. entered its 15th shutdown, stalling services, triggering layoffs, and deepening partisan clashes ahead of 2026 elections

White House Withholds $26 Bln from Democratic-Led States Amid Shutdown Fight
Solomon Boakye
Oct 2, 2025

The United States entered its 15th government shutdown since 1981 on Wednesday, paralyzing key federal services and furloughing hundreds of thousands of workers. At the same time, President Donald Trump’s administration moved to freeze $26 billion in funding for Democratic-leaning states, following through on threats to use the crisis to target political opponents, according to Reuters.

The shutdown immediately forced 750,000 federal workers off the job, while others, including troops and Border Patrol agents, reported to duty without pay. Scientific research, financial oversight, and environmental cleanup efforts were suspended. Even the Department of Veterans Affairs said it would continue burials at national cemeteries but would no longer mow grass or install headstones.

Vice President JD Vance warned the disruption could deepen. At a White House briefing, he said layoffs would follow if the shutdown persisted more than a few days, adding to the 300,000 job cuts already planned by December. The U.S. Patent and Trademark Office has already moved to cut 1% of its 14,000 employees, according to an internal letter chanced by Reuters.

Trump, meanwhile, celebrated the freeze as fiscal discipline, writing on Truth Social: “Billions of dollars can be saved.” His administration halted $18 billion in New York transit funds and $8 billion in green-energy projects across 16 Democratic-run states, including California and Illinois, moves critics said were aimed squarely at punishing political opponents.

House Democratic Leader Hakeem Jeffries, whose district includes New York transit projects at risk, warned the freeze would throw thousands of people out of work. “We haven’t heard from the White House since the White House meeting on Monday,” he told CNN. “Clearly, they wanted to shut the government down.”

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Senate Democratic Leader Chuck Schumer accused Trump of turning ordinary Americans into bargaining chips. “He is using the American people as pawns, threatening pain on the country as blackmail,” Schumer said.

Some Republicans voiced unease. Senator Thom Tillis said cutting off infrastructure funds could “create a toxic environment” and complicate efforts to end the shutdown. But Senate Republican Leader John Thune dismissed such concerns, saying: “Well, vote to open up the government and that issue goes away, right? I mean, it’s pretty straightforward.”

The freeze and shutdown came as Congress failed again to advance stopgap funding. On Wednesday, both a Republican bill to fund the government through November 21 and a Democratic bill to extend funding with added health benefits collapsed on the Senate floor. Reuters reported that Republicans, who hold a 53–47 Senate majority, need seven Democratic votes to reach the chamber’s 60-vote threshold for spending bills.

At the same time, Republicans accused Democrats of caving to partisan pressure. They repeated claims, rejected by the nonpartisan Congressional Budget Office, that the Democratic plan would extend health coverage to undocumented immigrants. According to the CBO, it would only restore benefits to legal categories, including asylum seekers and work visa holders.

The fight centers on $1.7 trillion for agency operations, which makes up roughly a quarter of annual spending. The rest goes to health and retirement programs and interest on the swelling $37.5 trillion U.S. debt.

In the chamber, a bipartisan group of senators huddled during the failed votes, searching for compromise. “I want to see that a deal is a deal, and I would like to see the Republicans make a commitment to work with us on health care,” said Senator Tim Kaine, a Virginia Democrat representing many federal workers near Washington.

As the political fight stretched into its first day, several federal agencies posted online shutdown notices blaming the “radical left” for the disruption, messaging that could run afoul of the Hatch Act, which is meant to insulate government services from partisan politics.

This shutdown immediately recalled Trump’s longest previous one, the 35-day standoff of 2018–2019, which ended after air traffic controllers began calling in sick, causing nationwide flight delays. Both sides are again preparing for a drawn-out clash, as they seek to assign blame and gain leverage ahead of the 2026 midterm elections that will determine control of Congress, Reuters reported.

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