Amid shutdown, Trump halts $2.1bn in funding for Chicago transit project

The United States government shutdown has entered its third day with no resolution in sight, as Republicans and Democrats remain locked in a bitter standoff.

Negotiations collapsed again on Friday after both parties blocked each other’s proposals in the Senate. Democrats continue to demand the reversal of healthcare cuts introduced earlier this year under the so-called “Big Beautiful Bill,” while Republicans accuse them of seeking subsidies for undocumented immigrants, an allegation Democrats dismiss as misinformation.

In a move that escalated tensions, the Trump administration on Friday froze $2.1 billion earmarked for a major rail transit project in Chicago, a city run by Democrats. Office of Management and Budget Director Russell Vought announced the suspension on X, claiming the funding was under review to ensure it was not tied to “race-based contracting.”

The White House confirmed that funding for Chicago’s Red Line extension and Purple Line modernisation was on hold. Press Secretary Karoline Leavitt defended the decision, arguing that contracts under the Biden administration’s Diversity, Equity and Inclusion (DEI) framework may have breached constitutional grounds.

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The move follows an earlier freeze on $26 billion in infrastructure funds for 16 Democratic-leaning states, including $18 billion for New York projects linked to Democratic leaders Hakeem Jeffries and Chuck Schumer.

Leavitt also warned that continued gridlock could lead to widespread federal layoffs. “If this shutdown continues, layoffs are an unfortunate consequence,” she said, adding that around 750,000 federal employees had already been furloughed while many others worked without pay.

Essential services such as border security, law enforcement and air-traffic control remain operational, though employees in these sectors are unpaid. The Department of Transportation has suspended recruitment and training of new air traffic controllers, raising concerns over potential disruption to travel if the shutdown drags on.

Meanwhile, Washington’s Smithsonian museums and the National Zoo announced they would remain open to the public until 11 October, though closures may follow if funding is not restored.

This is the first US government shutdown in seven years. The last one, also under Donald Trump, stretched for 35 days, the longest in American history.

With IANS inputs