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The confrontation between Donald Trump and Democrats in Congress regarding government funding escalated on Friday, as the federal operations shutdown that has immobilized Washington was expected to persist into the weekend.

On Friday afternoon, the Senate was unable to pass legislation endorsed by the White House, which aimed to reopen the government until late November, due to overwhelming opposition from Democrats in the upper chamber of Congress.

This budget dispute has caused government funding to lapse starting early Wednesday, leading to the furlough of thousands of federal employees and the closing of numerous government facilities.

As a result, the release of the monthly jobs report from the Bureau of Labor Statistics—a crucial indicator of the US labor market monitored by Wall Street economists and Federal Reserve officials—was postponed on Friday.

The shutdown poses a significant economic threat. According to Gregory Daco, chief economist at EY-Parthenon, the US could potentially lose about $7 billion in economic activity for each week the shutdown persists, though some losses, like delayed wages and postponed purchases, could be recovered once federal operations resume.

The White House has proposed a more dire economic projection, estimating a weekly loss of $15 billion, as reported in a memo by Politico. Prediction markets, reflected by Kalshi’s pricing, anticipate the shutdown may extend beyond two weeks.

The Office of Management and Budget has also signalled that some lost funding will not be restored, as it announced $27bn in cuts to transportation and energy programmes.

But even as the pain and impact of the shutdown began to be felt across the country, there were no signs that Trump and the Democrats were any closer to resolving the crisis and the attacks multiplied on both sides.

Overnight, the president posted a video on his Truth Social account depicting Russ Vought, his budget director, as a scythe-wielding reaper delivering destruction to a stormy US capital.

Vought on Friday morning announced $2.1bn in funding destined for infrastructure projects in Chicago would be blocked — after halting $18bn in projects for New York City earlier in the week. These cuts were targeted at cities that primarily vote for Democrats as Trump put pressure on his opponents to cave.

Karoline Leavitt, the White House press secretary, accused Democrats of launching “an intentional sabotage of our country and our people”. “This madness must end,” she said, at a briefing on Friday afternoon.

Business leaders urged lawmakers to pass the bill backed by Republicans and the White House to reopen the government.

Joshua Bolten, the chief executive of the Business Roundtable, a lobby group for top US companies, said: “A fully functional government is essential for American businesses, workers and consumers while policymakers continue working on a full-year funding package and other pressing issues.”

However, Democrats stood their ground, insisting they will only vote to reopen the government after Republicans enter talks on the fate of health insurance subsidies. These subsidies are set to stop at the end of the year, vastly increasing costs for millions of Americans.

Hakeem Jeffries, the Democratic leader in the House, said: “Donald Trump and the Republicans are not behaving responsibly, they’re not behaving in a serious manner. They don’t want to reopen the government, and they certainly do not want to address the healthcare crisis that Republicans have created.”

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