Washington, Oct 4 : The US government shutdown stretched into its third day, with Republicans and Democrats yet to reach a breakthrough.

Another round of votes by Republican and Democrat Senators was defeated by each side on Friday as Democrats continued to demand the reversal of healthcare cuts for American citizens in the 'Big Beautiful Bill,' which was passed earlier this year.

Republican lawmakers and the White House allege that the Democratic Party wants healthcare subsidies for illegal immigrants, which Democrats reject as a lie peddled by the Trump administration.

The Trump administration on Friday also suspended $2.1 billion in federal funding for a rail transit project in the Democratic-run city of Chicago.

Russell Vought, the Director of the Office of Management and Budget, announced the cut on X, saying that it has been 'put on hold to ensure funding is not flowing via race-based contracting.'

On Wednesday, the administration froze $26 billion for 16 Democratic-leaning states, including $18 billion for transit projects in New York, the home state of House Minority Leader Hakeem Jeffries and Senate Minority Leader Chuck Schumer.

In a press conference on Friday, White House Press Secretary Karoline Leavitt defended the suspension of funding for Chicago.

'We paused $2.1 billion in Chicago Infrastructure projects, specifically the red line extension in the red and purple modernization projects, and it's because the administration is concerned that the Biden administration was handing out taxpayer dollars to pay for this construction based on DEI (Diversity, Equity and Inclusion), the DoT (Department of Transportation) is reviewing the race-based contracting on unconstitutional grounds,' she added.

She also reiterated the threat of firing thousands of federal employees if Democrats continued to block the Republican-led bill.

'If this shutdown continues, layoffs are an unfortunate consequence of that. The Democrats have given the administration this opportunity, and we don't like laying people off. Nobody wants to do that. But sometimes in government, you have to make tough decisions,' she claimed.

In a post on Truth Social on Thursday, Trump called the shutdown an 'unprecedented opportunity.'

About 750,000 federal workers have been furloughed, while many others have been forced to work without pay.

Essential services such as border protection, law enforcement and air-traffic control continue to function for now. while food assistance programmes, government-funded pre-school, food inspectors and operations at national parks could be adversely affected soon.

Military and civilian staff are not being paid during the shutdown, while around 13,000 air traffic controllers are working without pay. The DoT has halted additional activities like hiring and training of new air traffic controllers.

If the shutdown is extended over a long period, air travel could face challenges as many of those workers would be forced to work without pay and may not report for duty.

The Smithsonian Institution's museums and National Zoo - Washington's major tourist attractions - announced that they would remain open to the public until October 11.

This is the first US government shutdown in seven years, as the last one happened under Trump 1.0 and lasted for 35 days ' the longest in history.

/IANS