The US government began its first partial shutdown in 17 years yesterday, idling as many as 800 000 federal employees, closing national parks and halting some services after Congress failed to break a partisan deadlock by a midnight deadline.
Congressional leaders have scheduled no further negotiations on spending legislation, raising concerns among some legislators that the shutdown could bleed into the more consequential fight over how to raise the US debt limit to avoid a first-ever default after October 17.
Many federal employees reporting to work yesterday were given a few hours to conduct shutdown activities, such as securing files and posting closed signs and phone messages, before being sent home until Congress passes a spending measure for the new fiscal year, which began yesterday. One government operation that will continue is the start of enrolment in the health-insurance exchanges mandated under President Barack Obama’s Affordable Care Act, the so-called Obamacare plan opposed by many Republicans.
Markets took the government shutdown in stride. Global stocks rose after the biggest decline in a month and treasuries fell on speculation any economic effect from it will be limited. The dollar weakened. The Bloomberg US dollar index fell 0.2 percent, crude fluctuated and corporate bond risk fell for the first time in five days.
Still, the shutdown will be broadly unpopular with the public, according to a national poll released today by Quinnipiac University. Seventy-two percent of Americans opposed Congress “shutting down major activities of the federal government” as a way to stop the president’s health-care law from going into effect, the national survey found.
The poll, conducted from September 23 to 29, showed 74 percent of voters disapproved of the job being done by congressional Republicans – their worst score ever – while 60 percent disapproved of Democrats’ job. Obama got a 45 percent overall job approval rating, versus his 46 percent score on August 2, according to the survey.
“Americans are certainly not in love with Obamacare, but they reject decisively the claim by congressional Republicans that it is so bad that it’s worth closing down the government to stop it,” said Peter Brown, an assistant director of the polling institute.
A partial federal government shutdown would cost the US at least $300 million (R3bn) a day in lost economic output at the start, according to consultancy IHS. That is a fraction of the country’s $15.7 trillion economy, but the effects will probably grow over time as consumers and businesses defer purchases and expansion plans.
The next step on a spending measure was uncertain yesterday. Representative Tom Cole, an Oklahoma Republican, said on MSNBC’s Morning Joe that House Republicans wanted to go to a conference with the Democratic-led Senate to negotiate.
Republican Representative Darrell Issa of California said Congress should agree on an interim spending deal to give 10 days “even 30 days if that was necessary” to settle differences over parts of Obamacare.
Senator Richard Durbin of Illinois, the chamber’s second-ranking Democrat, said he was willing to look at one aspect of the health-care law.
“We can work out something, I believe, on the medical device tax,” Durbin said on CNN. “That’s one thing the Republicans want to talk about; let’s sit down and put it on the table.”
The chances of a last-minute deal – seen so often in past fiscal fights – evaporated shortly before midnight as the Republican majority in the House of Representatives stood firm on its call to delay major parts of Obamacare for a year. Senate Democrats were equally firm in refusing to concede and planned a morning vote to reject the House’s call for formal talks.
“It is embarrassing that these people who were elected to represent the country are representing the Tea Party,” Senate majority leader Harry Reid, a Nevada Democrat, said after midnight. “This is an unnecessary blow to America.”
House Speaker John Boehner, speaking after 1am in Washington, invited Senate Democrats to the negotiating table.
“Let’s resolve our differences,” Boehner, an Ohio Republican, told reporters. “The House has voted to keep the government open, but we also want basic fairness for all Americans under Obamacare.”
Obama said on Monday that he would not negotiate under the threat of a government shutdown or a US debt default.
“You don’t get to extract a ransom for doing your job, for doing what you’re supposed to be doing anyway or just because there’s a law there you don’t like,” the president said. – Bloomberg