US government begins shutdown of operations amid budget row
Posted Wednesday, October 2 2013 at 01:00
More than 800,000 federal employees face unpaid leave with no guarantee of back pay once the deadlock is over.
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 800,000 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. Goldman Sachs estimates a three-week shutdown could shave as much as 0.9 per cent from US GDP this quarter. The White House’s budget office began notifying federal agencies to begin an “orderly shutdown” as the midnight deadline approached.
Shortly after midnight, President Obama tweeted: “They actually did it. A group of Republicans in the House just forced a government shutdown over Obamacare instead of passing a real budget.”
House Speaker John Boehner told reporters he hoped the Senate would agree to a bipartisan committee 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.
On Monday afternoon, the Democratic-led Senate voted 54-46 against a bill from House Republicans that would have funded the government only if 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, were due to take effect on Tuesday regardless of whether there is a shutdown. President Obama criticised Republicans for trying to refight the last election.
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. After the Senate vote, the chamber’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”.
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. The US government has not undergone a shutdown since 1995-96, when services were suspended for 21 days.