US begins government shutdown as budget deadline passes

 

What does shutdown mean for two million federal employees, agencies and tourist destinations?

The US government has begun a partial shutdown after the two houses of Congress failed to agree a new budget.

The Republican-led House of Representatives insisted on delaying President Barack Obama's healthcare reform - dubbed Obamacare - as a condition for passing a bill.

More than 700,000 federal employees face unpaid leave with no guarantee of back pay once the deadlock is over.

It is the first shutdown in 17 years and the dollar fell early on Tuesday.

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The Republican leadership looks and feels trapped - they made demands that they knew wouldn't be met rather than be accused of weakness and betrayal by their own hardliners”

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Goldman Sachs estimates a three-week shutdown could shave as much as 0.9% from US GDP this quarter.

On Tuesday, Mr Obama blamed the House of Representatives for the stalemate and said he would "keep working to get Congress to reopen the government [and] restart vital services".

"This shutdown was completely preventable. It should not have happened," he wrote in a letter to federal government employees.

"And the House of Representatives can end it as soon as it follows the Senate's lead, and funds your work in the United States Government without trying to attach highly controversial and partisan measures in the process."

On Monday, House Speaker John Boehner told reporters he hoped the Senate would agree to a committee between the two chambers known as a conference "so we can resolve this for the American people".

"The House has voted to keep the government open but we also want basic fairness for all Americans under Obamacare," he said.

But on Tuesday morning, the Senate voted 54-46 to reject the request for formal negotiations to end the impasse.

Who is affected?
Figures
  • State department will be able to operate for limited time
  • Department of defence will continue military operations
  • Department of education will still distribute $22bn (£13.6bn) to public schools, but staffing is expected to be severely hit
  • Department of energy - 12,700 staff expected to be sent home, with 1,113 remaining to oversee nuclear arsenal
  • Department of health and human services expected to send home more than half of staff
  • The Federal Reserve, dept of homeland security, and justice dept will see little or no disruption
  • US Postal Services continue as normal
  • Smithsonian institutions, museums, zoos and many national parks will close

Timeline: US budget crisis

  • 20 September: House votes to scrap funding for Affordable Care Act ("Obamacare")
  • 30 September: Congress passes two budget bills coupled to Obamacare, both rejected by Senate
  • 1 October: Key provisions of Obamacare come into force despite shutdown
  • 17 October: Deadline for extending government borrowing limit, or debt ceiling

The BBC's Mark Mardell in Washington says the divide in US politics has grown so bitter that government itself cannot function.

Democrats were never likely to make concessions on healthcare reform - Mr Obama's signature achievement and a central issue in last year's presidential election, our correspondent says.

But Republicans have made demands that they knew would not be met rather than be accused of weakness and betrayal by their own hardliners, he adds.

Engineers with the US Navy talk to the BBC about what they will do during a shutdown: Make skis

On Monday, the Democratic-led Senate twice rejected bills from House Republicans that would have funded the government only if funding for President Obama's healthcare law was delayed for a year.

Major portions of the healthcare law, which passed in 2010 and has been validated by the US Supreme Court, took effect on Tuesday regardless of whether there is a shutdown.

President Obama went on national television to criticise Republicans for trying to refight the last election.

Obama accused Republicans of demanding ransom over Obamacare

A shutdown would have "a very real economic impact on real people, right away," he said, adding it would "throw a wrench" into the US recovery.

"The idea of putting the American people's hard-earned progress at risk is the height of irresponsibility, and it doesn't have to happen."

As the shutdown neared, the Senate's Democratic majority leader blamed Republicans for the imminent halt to all non-essential government operations.

"It will be a Republican government shutdown, pure and simple," said Harry Reid, referring to the Republicans as "bullies".

A US Park Police officer watches at left as a National Park Service employee posts a sign on a barricade closing access to the Lincoln Memorial in Washington on 1 October 2013. The White House issued orders for government offices to start shutting down as the midnight deadline approached
Tourists look at a sign announcing that the Statue of Liberty is closed due to a US government shutdown in New York, on 1 October 2013. Tourism revenues are expected to take a hit as attractions such as the Statue of Liberty close down
Signpost announcing closure of Library of Congress in Washington DC on 1 October National parks, museums, federal buildings and government services have been shut down indefinitely
A furloughed federal employee holds a sign on the steps to the US Capitol after the US government shut down last night, on Capitol Hill in Washington on 1 October 2013. Some 700,000 federal workers have been sent home on unpaid leave
A barricade leading to the Lincoln Memorial prevents access to tourist buses in Washington on 1 October 2013. Some White House staff have been sent home, with all Smithsonian institutions in Washington closed

Mr Obama has signed legislation ensuring that military personnel would be paid. The defence department had advised employees that uniformed members of the military would continue on normal duty, but that large numbers of civilian workers would be told to stay home.

US media

Michael Gerson, Washington Post: We are no longer seeing a revolt against the Republican leadership, or even against the Republican "establishment"; this revolt is against anyone who accepts the constraints of political reality.

Editorial, Chicago Tribune: Once Republicans and Democrats stop grandstanding... we think there's an easy solution to this impasse.

International media

Pierre-Yves Dugua, Le Figaro, France: The [US] is being humiliated by the inability of its political system to carry out its primary mission: to pass a budget.

Patrick Welter, Frankfurter Allgemeine Zeitung, Germany: The failure to reach agreement casts a dark shadow on the next and more important forthcoming round in the fiscal row.

Andrew Coyne, National Post, Canada: The result of all this haggling, taken together, has been just the sort of balanced approach, mixing spending cuts and tax increases, that experts advise.

Under the shutdown, national parks and Washington's Smithsonian museums will close, pension and veterans' benefit cheques will be delayed, and visa and passport applications will go unprocessed.

Programmes deemed essential, such as air traffic control and food inspections, will continue.

The US government has not undergone a shutdown since 1995-96, when services were suspended for a record 21 days.

Republicans demanded then-President Bill Clinton agree to their version of a balanced budget.

As lawmakers grappled with the latest shutdown, the 17 October deadline for extending the government's borrowing limit looms even larger.

On that date, the US government will reach the limit at which it can borrow money to pay its bills, the so-called debt ceiling.

House Republicans have also demanded a series of policy concessions - including on the president's health law and on financial and environmental regulations - in exchange for raising the debt ceiling.

Guy Crundwell from Connecticut told the BBC that politicians should be solving the country's problems rather than engaging in a "charade".

"I am very fiscally conservative but for moral issues I lean towards the Democrats, but I'll be damned if I want to see either of them wasting my money on this sort of posturing."

 

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  • Comment number 494.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    +3

    Comment number 493.

    Considering the fundamentally flawed system that does not work plus the US Congress in which 90% of the people have no confidence, it is inevitable.US Supreme Court over two years ago ruled that affordable health care is Constitutional over GOP facade and perversity of inequality. Some over 150 Republican bills to repeal the law have failed. Not to fund is illegal. Obama needs an E. Order

  • rate this
    0

    Comment number 492.

    What is so ironic is the US spends over $740bn on defense & homeland security per year, to defend themselves from terrorists and preserve the American way of life. That spending is destroying America, the terrorists are winning without doing anything

    The Roman & Greek empires collapsed as they spent more & more on their armies fighting in far away lands, destroying the money supply back home.

  • rate this
    -1

    Comment number 491.

    Ironic that a country with the worlds largest employer, a public sector employer, is being held to ransom by right wing nuts who oppose public healthcare.
    I suppose irony is lost on these rabid republicans - ditto the fact that the two biggest debt ceiling raisers are Reagan and Dubya.

  • rate this
    +1

    Comment number 490.

    #472 Dun. "EU to be next world power"

    Surely not any time soon; If it tried to become a state, UK would quit & German power is potentially very unstable, particularly in relation to France. If USA fails, China is almost ready to step in it's place. I just hope this "Carry On Up The Potomac" farce ends soon.

 

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