US government shutdown

US Senate rejects House amendments to spending bill as shutdown nears

Bill with amendments that would delay Obamacare defeated for second time as bill heads back to Republican-controlled House

the Guardian,

30 September, 2013

The US Senate rejected an attempt by the House of Representatives to make the continued funding of the federal government contingent upon a one-year delay to Barack Obama's healthcare reforms on Monday, forcing Republicans to decide whether they would trigger a government shutdown by pressing on with their high-stakes attempts to hobble the law.

Just after 2pm, senators voted largely along party lines, by 52 votes to 46, to strip the provisions relating to the Affordable Care Act from the resolution passed early on Sunday morning by the House of Representatives.

House Republicans were meeting on Monday afternoon to contemplate their next move.

Amid the deadlock, the financial markets all ended the day down. The Dow Jones Industrial Average closed down by more than 128 points (0.84%), the Standard and Poor 500 index and the Nasdaq exchange were also down by the end of the day.

The White House appeared to offer a tentative olive branch, announcing that President Obama would meet the speaker of the House of Representatives, John Boehner, to discuss the budget impasse. Obama had previously refused to hold any negotiations over what the administration insists is a blackmail strategy by House conservatives.

"I am not only open to, but eager to have negotiations around a long-term budget," said Obama, adding that any discussion needed to be "in good faith" and without threats.

But Obama refused to contemplate any attempt to link his healthcare reforms, which start to take effect on Tuesday, and a separate Republican threat to block the government's borrowing authorisation, also known as the debt ceiling, which needs to be negotiated by 17 October. Without a debt ceiling deal, the US government could fail to meet its debts. "Certainly we can't have any meaningful negotiations under the cloud of potential default – the first in US history," Obama said.

If a budget deal is not reached by midnight, about 800,000 workers at government agencies such as national parks, museums, the tax-collection service and Nasa will be sent home.

The standoff has pitched Tea Party-backed Republicans against both Obama and their more moderate Republican colleagues. The former Republican presidential candidate, senator John McCain, called on conservatives to accept they lost the fight against the Affordable Care Act, also known as Obamacare, when it passed both houses of Congress and was signed into law in 2010.

At the weekend, the Republican-controlled House of Representatives passed a resolution that made funding the government until the middle of December contingent upon a one-year delay of the Affordable Care Act. On Monday, the Democrat-controlled Senate was expected to strip out the healthcare law rider and send back a "clean" budget bill to the House.

The game of congressional ping-pong was expected to intensify with a proposal to send back to the Senate a budget resolution with only one healthcare-related amendment, which would prevent lawmakers and their staff from enjoying a healthcare subsidy under the Affordable Care Act.

Boehner calculated that senators would find it hard to block a budget resolution that contained only this rider relating to Obamacare, as they would risk being seen to precipitate a government shutdown in order to protect their own perks.

But House conservatives have consistently blocked Boehner's tactics in recent days. Some wanted to push for the House to take a harder line and pass a resolution that would more fully dismantle the healthcare law.

Either way, Reid and Obama – who have insisted they will only pass a clean budget resolution – appeared determined to stand their ground, believing that US public opinion will continue to largely blame Republicans for the predicament. History would appear to back the administration's judgement: shutdowns in December 1995 and January 1996 were largely blamed on Republicans, who controlled the House of Represenatives at the time, and helped President Bill Clinton.

Obama has stepped up his rhetoric in recent days, accusing the Republicans of holding the government to ransom over a law that has nothing to do with the budget, and that has already been passed by both branches of Congress.

If a deal was not reached midnight, the shutdown would begin at midnight and affect all federal employees not deemed to be "essential" by the White House office of budget management.

Asked if he thought a shutdown was now inevitable, Richard Durbin, the second most senior Democrat in the Senate, said on Sunday: "I'm afraid I do." Durbin told CBS's Face the Nation that he was open to negotiating over the tax on medical devices, "but not with a gun to my head, not with the prospect of shutting down the government".

Jack Ablin, chief investment officer at BMO private bank, said on Monday that the row was likely to have serious consequences for the wider economy. "This is a contrived crisis that is going to have real conseq ences," said Ablin. "It will cause unnecessary volatility in the market and ultimately cost the economy."

Even if a deal is done over the budget, a more serious crisis looms as Congress begins negotiations over raising the US's $16.7tn borrowing limit. Without an agreement, treasury secretary Jack Lew has warned that the federal government will run out of money by 17 October and be unable to meet most of its obligations.The last row over the debt ceiling in 2011 led to a downgrade of US debt and panic on stock markets worldwide.

10 ways govt shutdown would hurt America

With the threat of a federal government shutdown hanging over the US economy, here is a handy list of the possible effects American citizens and the rest of the world could face if no deal is reached to continue funding.

RT,

30 September, 2013

In the most recent developments in a budget battle, the US Senate Democrats have rejected a proposal by the Republican-led House of Representatives to put off Obamacare for a year in return for temporary funding of the federal government beyond Monday.

Though adopting spending bills by Oct. 1, the start of the new fiscal year in the US, may seem a purely political issue, if Congress fails to approve funding for the federal government this would seriously affect the daily routine of ordinary US citizens, let alone up to 800,000 federal employees who would be sent home Tuesday without pay if the shutdown takes place.

The last government shutdown lasted 21 days, from December 1996 to January 1997, and cost the administration of US President Bill Clinton cost an estimated $2 billion, according to the White House’s Office of Management and Budget.

In remarks made by Obama Monday evening the President struck a defiant note on the healthcare law.

"An important part of the Affordable Care Act takes effect tomorrow, no matter what Congress decides to do today. The Affordable Care Act is moving forward. That funding is already in place. You can't shut it down."

In another pointed remark aimed at Republicans tying Obamacare to the government shutdown the President essentially accused lawmakers of political blackmail.

"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 that you don't like." 

1 Countdown to US default looms

  A halt of US government operations would drag the world’s biggest economy closer to bankruptcy, something unprecedented in US history. If no budget deal is done, the US would bump up against their “debt ceiling”  and run out of money by October 17. By then, the US government would have less than $30 billion cash on hand, Treasury Secretary Jacob Lew has calculated.

2 Hundreds of thousands of federal employees on furlough

  A one-time layoff of 800,000 people working for the US government would erode the earlier projected economic growth of 2.5 percent for the fourth quarter of 2013 by about 0.32 percentage points, according to a forecast by Mark Zandi, chief economist and co-founder of Moody's Analytics. That projection assumes a two-week shutdown. If it drags into a whole month, the loss of GDP would rise to 1.4 percentage points.

3 Troops’ paychecks stopped

  About 1.4 million military active-duty personnel would keep on working, but with their paychecks delayed. Approval for troops’ paychecks is dependent on Obama’s proposed 2014 federal budget being passed by Congress.

4 Women and children’s nutrition program threatened

 Pregnant women and new moms who are poor and facing “nutrition risk” won’t be able to buy healthy food, as a looming shutdown would put bracers on the $6 billion Special Supplemental Nutrition Program for Women Infants and Children (WIC).

5 $85 billion in cuts to federal programs

When a shutdown was last threatened in March 2013, it would have resulted in $85 billion in automatic cuts in spending on federal programs – many aimed at alleviating social hardship. The cuts, known as sequestration, would affect grants to local organizations and funds that keep those programs running.

6 Housing loans halted

US federal programs that provide for about 30 percent of all new loans in the housing market – a backbone of the country’s economy – will be shut down. Government funding of new businesses will also be halted, as well as workplace health and safety inspections.

7 Trade talks scuppered?

US plans to have a Pacific trade deal, the Trans Pacific Partnership, signed with the US’s Asian partners could stall, as Obama may decide not to travel to this weekend’s Bali, Indonesia meeting of the Asia-Pacific Economic Cooperation nations. While he could still go if no deal is done by then, it could be a gift for his Republican opponents if Obama was seen to be jetting off to a tropical paradise at a time when federal employees were sent home without pay.

8 Visa delays likely

  Thousands of Americans may not be able to get passports for foreign travel, and tourists travelling to the US will likely face delays in visa processing. During the last government shutdown in 1996-97, some 20,000-30,000 applications remained unprocessed daily.

9 Space program on hold

  Space agency NASA will be hit the most, as the agency will need to furlough about 97 percent of its employees, though it will continue to keep workers at Mission Control in Houston and elsewhere to support the International Space Station, where the two NASA astronauts currently on board, Michael Hopkins and Karen Nyberg, may not know whether they have jobs to come back to.

10 National parks, museums and zoos would close to the public

State-funded museums, art galleries and zoos across the country would keep their doors closed Tuesday, leaving thousands of employees furloughed and visitors unable to see attractions. US national parks, from Yosemite to the Shenandoahs, as well as Washington’s National Mall, Lincoln Memorial and Constitution Gardens, would also be closed.