(MENAFN- Live Mint) The US government shutdown widened on Wednesday as President Donald Trump's administration froze $26 billion in funding for Democratic-leaning states.

The freeze included $18 billion for transit projects in New York, home to Senate Democratic Leader Chuck Schumer and House Democratic Leader Hakeem Jeffries, and $8 billion for green-energy programs in 16 Democratic-run states such as California and Illinois.

Democrats accuse Trump of partisan targeting

Top Democrats accused the president of weaponizing the shutdown for political purposes. Jeffries warned that halting subway and harbor projects in his home state of New York would“throw thousands out of work.”

Schumer was even more blunt:“He is using the American people as pawns, threatening pain on the country as blackmail.”

Democrats remain dug in on demands to extend healthcare subsidies before agreeing to a short-term spending measure. They also want assurances that Trump will not ignore provisions of spending bills he signs into law, a practice they accuse him of repeating since his return to office.

Layoffs loom if shutdown drags on

White House officials warned that permanent layoffs could soon follow if the standoff continues. Vice President JD Vance told reporters:“If this thing drags on for another few days or, God forbid, another few weeks, we are going to have to lay people off.”

The administration has projected as many as 300,000 workers could be cut by December. In an unusual move, the US Patent and Trademark Office has already notified staff that it would lay off 1% of its 14,000 employees, according to an internal letter seen by Reuters.

Previous shutdowns have not resulted in permanent job cuts, underscoring the severity of the current confrontation.

Republican reactions split

While some Republicans backed Trump's hardball tactics, others expressed concern. Senator Thom Tillis warned:“They need to be really careful with that, because they can create a toxic environment here.”

By contrast, Senate Republican Leader John Thune dismissed concerns that freezing funds amounted to political hostage-taking.“Well, vote to open up the government and that issue goes away, right? I mean, it's pretty straightforward,” he told reporters.

Gridlock in the Senate

The Senate again rejected two competing measures - a Republican bill funding the government through November 21 and a Democratic proposal pairing funding with expanded healthcare benefits.

With Republicans holding a 53-47 majority, they need at least seven Democratic votes to clear the chamber's 60-vote threshold. At stake is $1.7 trillion in agency operations funding, roughly one-quarter of total annual spending.

A bipartisan group of senators huddled on the floor during the failed votes, trying to find common ground.“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 who represents many federal workers near Washington.

Blame game ahead of 2026 elections

Both parties sought to shift blame as the shutdown entered its third day, mindful of the high stakes ahead of the 2026 midterm elections.

Democrats said Republicans were responsible for the crisis, given their control of Congress and the White House. Republicans countered that Democrats were bowing to partisan pressure to oppose Trump, even though they had supported previous spending bills.

The GOP also repeated the claim that Democrats were seeking to extend healthcare benefits to undocumented immigrants. However, the nonpartisan Congressional Budget Office clarified that the plan would only restore coverage to certain categories of legal immigrants, such as asylum seekers and individuals with work visas.

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