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Standoff continues on the second day of the shutdown… U.S. Treasury Secretary warns, "Shutdown will hit GDP"
US President Donald Trump. Reuters Yonhap News.
U.S. President Donald Trump warned on the 2nd (local time) that if the Democratic Party does not cooperate to end the federal government shutdown, he will move to defund government programs that are important to the Democrats.
President Trump announced on the social media platform Truth Social that he would be meeting with Russell Vought, Director of the Office of Management and Budget (OMB), later that day.
President Trump explained that the purpose of the meeting is to hear "his recommendations on which of the many 'Democrat agencies' (referring to government organizations or programs aligned with Democratic political ideology), most of which are nothing more than political scams, should be cut, and whether those cuts should be temporary or permanent."
The United States is entering its second day of a government shutdown, which suspends all non-essential government operations after the Republican and Democratic parties in Congress failed to pass budget bills necessary for the 2026 fiscal year, which began on the 1st.
The White House and the Republican Party are insisting on passing a continuing resolution (CR) to maintain government spending at the previous year's levels to end the shutdown. However, the Democratic Party, which has been unable to counter President Trump's unilateral style of governance, is using the shutdown as an opportunity to resist.
In particular, the Democratic Party is demanding an extension of "Obamacare" (Affordable Care Act) subsidies, which are set to expire at the end of this year, as a condition for passing the interim budget bill. The White House is pushing back, claiming that the subsidies benefit illegal immigrants, resulting in a continued stalemate.
Under these circumstances, President Trump is ensuring that his key policy initiatives—such as immigration enforcement and tariff policies—are not affected by the shutdown, while simultaneously using the shutdown as leverage to cut budgets for programs critical to the Democratic Party.
The day before, OMB Director Vought announced that he would withhold approximately $18 billion in funding for infrastructure projects in New York, the state representing the districts of Democratic leaders in the Senate and House, and cut approximately $8 billion in funding for eco-friendly and renewable energy projects in 16 Democratic-leaning states.
Typically, during a government shutdown, the government places non-essential federal employees on unpaid leave, but the Trump administration is exerting pressure by threatening to terminate these employees instead of merely furloughing them.
President Trump attempted radical government restructuring early in his term, but he was repeatedly blocked by the courts.
President Trump remarked, "I cannot believe the Radical Left Democrats have given me this unprecedented opportunity. They are not stupid, so perhaps this is their way of quietly and quickly Making America Great Again."
He further claimed, "The Democrats want to give your healthcare money to illegal immigrants and keep our borders open to criminals from all over the world."
Meanwhile, Treasury Secretary Scott Bessent warned in an interview with CNBC on the same day that the shutdown could slow U.S. economic growth and urged the Democratic Party to cooperate.
Secretary Bessent stated, "Shutting down the government and lowering GDP is not the way to have a conversation," adding, "We could see hits to GDP, growth, and the American working class."
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