US Shutdown: White House Freezes Funds For Democratic States

Updated: Thursday, October 2, 2025, 7:59 [IST]

Signs of the federal government shutdown such as the closing of the US Capitol Visitor Center were visible on Wednesday as it came into effect

The Trump administration has frozen some $26 billion (€22 billion) for projects in Democratic-leaning states on the first day of the federal government shutdown.

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The Trump administration froze approximately $26 billion for projects in Democratic-leaning states, including $18 billion for transit projects in New York and nearly $8 billion for green energy projects across 16 states. The shutdown, which began Wednesday, has led to furloughs for around 750,000 federal workers and the suspension of various activities, as the Senate failed to pass a funding bill.

The White House announced the freeze on Wednesday on roughly $18 billion in payments to build transit projects in New York, home to Congress's two top Democrats.

The freeze also includes almost $8 billion in green energy projects in 16 Democrat-run states, including California and Illinois.

Chuck Schumer, the top Democrat in the Senate who is from New York, said Trump was targeting regular Americans for partisan aims.

"He is using the American people as pawns, threatening pain on the country as blackmail," Schumer said.

Republican Senator Thom Tillis said he was concerned that the transit fund freeze for New York could make it harder for Congress to exit the shutdown.

"They need to be really careful with that, because they can create a toxic environment here," Tillis said.

Vance warns layoffs could follow if shutdown lasts

Meanwhile, Vice President JD Vance warned that the administration might sack federal workers if the shutdown lasts more than a few days.

Previous shutdowns have not resulted in permanent layoffs.

Some 750,000 federal workers are expected to be furloughed since the shutdown started at midnight on Wednesday.

Other federal employees, such as troops and Border Patrol agents, began to work without pay.

Scientific research, financial oversight, environmental cleanup efforts and a wide range of other activities have also been suspended under the shutdown.

Senate fails again to pass funding bill

On Wednesday, the Senate again rejected efforts to pass a bill to fund the federal government.

Both a Republican proposal that would fund the government through November 21 and a Democratic vote that would pair funding with additional health benefits failed in floor votes.

Trump's Republicans hold a 53-47 Senate majority. But they need the support of at least seven Democrats to meet the Senate's 60-vote threshold for spending bills.

It is the first US federal government shutdown in almost seven years. Government closed for 35 days in 2018-2019 during Donald Trump's first term as president.

Edited by: Srinivas Mazumdaru

Source: DW