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Govt shutdown drags on amid fiscal stalemate

With no agreement in sight, mass layoffs in US likely as political sides trade blame

By BELINDA ROBINSON in New York | CHINA DAILY | Updated: 2025-10-06 08:05
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Signage indicates the closure of the National Gallery of Art during the fifth day of a partial government shutdown in Washington, D.C., U.S., October 5, 2025. [Photo/Agencies]

The United States government has still not been able to broker a legislative end to the shutdown that began on Wednesday as the two political sides blamed each other over the fiscal stalemate and President Donald Trump's administration withheld federal funding for some Democrat-run states.

The Senate left Washington, DC on Friday, after failing to pass funding and signaling no end in sight to the snarling of government business. It means some agencies cannot reopen and some workers are not being paid.

Instead, under Trump, at least $28 billion in funding that was already approved by Congress is being withheld or canceled for 16 mainly Democrat-run cities and states, such as New York, California and Illinois.

Russell Vought, director of the White House Office of Management and Budget, announced on Friday that at least $2.1 billion in funding for Chicago would be withheld as they launched an investigation into whether contractors had been hired based on race or not. The money was going to be used to upgrade the transit system.

New York has seen $7.6 billion in funding from the federal government paused. The funds were due to go toward clean energy initiatives. Oregon has also seen funds for infrastructure halted. The administration said it may target Portland next.

"Without a doubt, blue states are on the front lines of the attacks, they're coming after us," New York's Democratic Governor, Kathy Hochul, told The New York Times.

Many states that have not received funds have launched lawsuits in an effort to get the federal aid.

There are approximately 2.1 million civilian government workers who are facing some, or all of the effects of the politicians' inability to strike a deal. At least 750,000 government workers are furloughed due to the shutdown, The Washington Post reports.

Workers at the Department of Education and the Department of State are among those that are furloughed. Staff members at federal buildings are also facing uncertainty such as security guards, cooks and janitors.

Some federal workers have already seen job cuts by the Department of Government Efficiency earlier this year. Trump suggested he would like to cut more "Democrat agencies", and enact mass layoffs.

The American Federation of Government Employees, or AFGE, the largest union for federal workers, sued the administration last week in an attempt to block it from firing any workers during the shutdown. They argued this would be illegal.

AFGE President Everett Kelley said in a statement that "when the government shuts down, American families pay the price. Congress must stop playing politics with the livelihoods of federal workers and the communities they serve, end this shutdown immediately, and stop holding workers hostage".

Public services affected

While the shutdown has affected airport staff and others in public roles, some essential services such as the Immigration and Customs Enforcement are still running and carrying out raids.

The House Republicans supported a short-term measure to fund the government until Nov 21, but Democrats blocked it. Republicans blame Democrats for the shutdown saying they want to give free healthcare to illegal immigrants.

But immigrants who are in the US illegally are not eligible for any federal healthcare programs such as insurance through the Affordable Care Act exchange or Medicaid.

Democrats are, however, trying to get healthcare changes into the next congressional spending package and a reversal of Medicaid cuts made in the Republican-led tax and spending bill signed into law in July.

Trump posted a manipulated AI video of House Democratic leader Hakeem Jeffries on social media showing him in a sombrero alongside Senate Minority Leader Chuck Schumer who spoke in a fake voice. Vice-President JD Vance dismissed concerns over it, telling reporters at the White House briefing Wednesday that it was a joke.

Republican Senator Lisa Murkowski of Alaska, a Trump critic, urged cooler heads, saying: "We're all Americans. We shouldn't be targeting different areas in ways that would be viewed as punitive. That's just not what we do."

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