US Government Shutdown Live Updates: White House warns of imminent layoffs as shutdown drags on with no resolution in sight

The federal government plans to cancel billions of dollars in climate funding, mostly in Democratic-led states, according to Office of Management and Budget director Russ Vought. He said around $8 billion meant for climate projects in 16 states, including California, New York, Massachusetts, Illinois, and Washington, will be withdrawn. Only two of these states, New Hampshire and Vermont, have Republican governors.

It is still unclear which projects will be affected, and the Department of Energy has not yet commented. Vought also said about $18 billion in New York City infrastructure projects have been put on hold, linking the decision to concerns over unconstitutional diversity, equity, and inclusion policies. Both top congressional Democrats, Chuck Schumer and Hakeem Jeffries, represent New York.

“We would be laying off a lot of people that are going to be very affected. And they are Democrats, they are going to be Democrats,” Trump said to reporters in the Oval Office on Wednesday.

He further commented that “a lot of good can come down from shutdowns” and hinted that the shutdown could be used as an opportunity to “get rid of a lot of things we didn’t want, and they would be Democrat things.”

During a government shutdown, thousands of federal workers are furloughed, with their pay suspended. However, under the US Constitution, the president and members of Congress continue to receive their salaries, regardless of the shutdown.

Some politicians from both parties have criticised this practice, calling it a double standard for federal employees. Members of Congress, including Democrats Andy Kim and Josh Gottheimer, and Republican Kat Cammark, have requested that their pay be suspended for the duration of the shutdown

Senate Democrats, for the second time, blocked Republicans’ stopgap spending bill aimed at funding the government through November 21. The measure failed to advance on a 55-45 vote, falling short of the 60 votes required.

Several federal government websites have posted shutdown notices, some featuring unusually partisan language.

The Department of Justice website states: “Democrats have shut down the government. Department of Justice websites are not currently regularly updated.”

Meanwhile, a banner on the White House site reads: “The Democrats have shut down the government.”

The Trump administration has frozen approximately $18 billion in funding for New York City, drawing accusations of political retaliation amid the ongoing shutdown standoff.

Russ Vought, director of the White House’s Office of Management and Budget, defended the move in a post on the social media platform X, stating that the pause was meant to “ensure funding is not flowing based on unconstitutional DEI principles.”

DEI stands for diversity, equity, and inclusion, a term used to describe efforts to promote representation and accessibility in various sectors, including the workplace and academia.

The Senate voted 47-53, with all Republicans opposed, rejecting the Democrats’ counterproposal to fund the government. The Senate is now voting on the House-passed GOP stopgap spending bill, which is also expected to fail.

Aguilar stated that the Trump administration has made it clear they are not interested in negotiating an end to the shutdown.

He referenced Trump’s threats from the previous day, in which the former president warned he would take “irreversible” actions intended to harm Democrats if the shutdown occurred.

“The goal of Donald Trump and his administration has always been to make this painful. This isn’t about policy priorities for them,” Aguilar said.

“They want to send a message, and if that means hurting people, laying off workers, or halting congressionally authorized projects, they’re willing to do it,” he continued, citing Trump’s move to pause funding for New York City.

“It’s clear we don’t have genuine negotiating partners,” Aguilar added

Democratic Caucus Chairman Pete Aguilar and Vice Chair Ted Lieu have begun speaking. “This is a sad, serious, and somber moment for our country,” Aguilar stated.

Republican House Speaker Mike Johnson has stated that a government shutdown presents the executive branch with a significant chance to reduce the size of government, calling it a “major backfire” for Democrats.

In a Fox Business interview, Johnson admitted that a shutdown could be “ very damaging for Americans,” who depend on government services.

Amid the government shutdown, travelers at US airports on Wednesday saw little disruption. Air traffic controllers and TSA staff are required to work without pay, with the controllers’ union urging normal operations, as reported by NYT.

The Interior Department has told employees to take home their government laptops and cell phones to stay updated on potential mass firings during the shutdown, as reported by New York Times.

A Goldman Sachs analysis warns that the economic impact of a government shutdown could be felt within days.

Unlike previous shutdowns, which financial markets have typically brushed off due to their short duration, this time the situation may be more severe.

The analysis points out that the lack of clear negotiations sets this potential shutdown apart, with few similar situations to draw comparisons from.

Governor Wes Moore, like many Democrats, took aim at President Trump over the ongoing shutdown. “On behalf of the six and a half million Marylanders, my message to President Trump is clear: Stop this shutdown,” he said. “You’re the one causing it. We’re the ones dealing with it.”

Here are the top 10 most-impacted agencies after the government shutdown:

Russell T. Vought, the White House budget director, is scheduled to brief House Republicans on a call at 1pm to discuss the “lapse in appropriations,” according to a notice sent to members. Speaker Mike Johnson has sent House Republicans back home for the week.

Wall Street’s major indices opened lower on Wednesday after the federal government shut down, increasing concerns over its potential impact on the economy. Investors were also digesting soft private payrolls data while awaiting other key economic releases.

In early hours of trading, the Dow Jones Industrial Average slipped 37.22 points, or 0.08%, to 46,360.63.S&P 500 fell 13.66 points, or 0.21%, to 6,674.19, and the Nasdaq Composite dropped 62.93 points, or 0.26%, to 22,607.36

The furlough impact is severe across US agencies, with the Environmental Protection Agency hardest hit at 89% of its workforce.

Education and Commerce follow at 87% and 81% respectively. Labour and housing also face major disruptions, reflecting widespread government operational slowdowns affecting critical public services and regulatory functions, as reported by NYT.

The Senate will hold another round of votes at around 8.30 pm Indian time on rival spending bills from Democrats and Republicans aimed at ending the shutdown, the NYT reported. However, Republicans signaled they will continue pushing repeated votes in order to pin Democrats for rejecting the House-passed stopgap measure that would temporarily fund the government till November 21.

VP J D Vance said during an interview with Fox News, “You don’t shut the government down, you don’t take the government as a hostage, because you want to engage in a negotiation about healthcare costs,” blaming democrats for the shutdown

-Military bases, arsenals, depots and federal armories

-Veterans’ Affairs medical facilities

-Federal prisons and courthouses

-National laboratories

-National Park System facilities, National Forests, and other federally owned or managed lands

-Ports including seaports, airports, and intermodal terminals that may host federal customs processing facilities or law enforcement

-IRS facilities

-Law enforcement agencies like the FBI, ATF, DEA, or CBP

-General federal office buildings

Democrats are demanding a rollback of Medicaid cuts and an extension of tax credits to make Affordable Care Act premiums more affordable. Republicans, meanwhile, have floated a stopgap funding bill to keep the government running until November 21. Republicans have flatly rejected the Democrats’ plan as untenable.

For the first time in nearly seven years, Washington ground to a halt Wednesday as a bruising standoff between President Trump and Democrats shut down much of the federal government. Services that millions of Americans depend on are thrown into disarray, exposing the immediate fallout of the funding deadlock.

Essential lifelines remain intact — Social Security checks will still go out, Medicare benefits will continue and the Postal Service will keep delivering mail. But beyond those critical functions, the machinery of government has largely stalled.

According to a Reuters report, US airlines have warned that a partial government shutdown could strain American aviation sector. The shutdown would mean that many workers would be forced to work without pay and that may lead to slow flights and halt on other functions.

More than 11,000 Federal Aviation Administration (FAA) employees, about a quarter of its staff, would be temporarily suspended if government funding lapses and the adminsitration goes into a shutdown mode, US Transportation Department had said. The country will wake up to a federal government shutdown on Wednesday.

The White House, meanwhile, wasted no time in assigning blame, launching a shutdown countdown clock on its website. Before the clock, a statement reads, “Democrats have shut down the Government.” When clicked, the text redirects to another page which has the list of departments to be impacted due to the shutdown and says, “Americans don’t agree with Democrats’ actions.”

Washington is bracing for a government shutdown after the Senate failed to pass a Democratic-backed funding proposal. The bill, aimed at keeping the government running, fell short in a 55–45 vote, triggering a midnight deadline crisis.

Senate Minority Leader Chuck Schumer said Democrats remain ready to negotiate a “truly bipartisan agreement” to avert the shutdown. Tensions between the two parties remain high.