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| Q&A: 2013 US budget brawl | Q&A: 2013 US budget brawl |
| (4 days later) | |
| The US government remains in a partial shutdown after Republicans refused to approve a budget unless President Barack Obama's healthcare law was delayed. | The US government remains in a partial shutdown after Republicans refused to approve a budget unless President Barack Obama's healthcare law was delayed. |
| The standoff follows what has become close to an annual budget fight in Washington. | The standoff follows what has become close to an annual budget fight in Washington. |
| Mr Obama has lambasted Republicans for holding Washington "hostage", while Republicans have blamed the president's refusal to negotiate a budget solution until the government is reopened. | Mr Obama has lambasted Republicans for holding Washington "hostage", while Republicans have blamed the president's refusal to negotiate a budget solution until the government is reopened. |
| Here's where things stand. | Here's where things stand. |
| Why did this happen? | Why did this happen? |
| It is a matter of political wrangling between the Republicans, who control the lower house - the House of Representatives - and the Democrats, who have a majority in the upper house, the Senate. | It is a matter of political wrangling between the Republicans, who control the lower house - the House of Representatives - and the Democrats, who have a majority in the upper house, the Senate. |
| Due to disagreements between the two houses over federal government spending, the US Congress failed to pass a budget before the fiscal year ended on 30 September. | Due to disagreements between the two houses over federal government spending, the US Congress failed to pass a budget before the fiscal year ended on 30 September. |
| Since President Obama's election, the parties have never come to a resolution on a US budget that extends further than a few months. They've just negotiated around the margins and come up with short-term fixes. | Since President Obama's election, the parties have never come to a resolution on a US budget that extends further than a few months. They've just negotiated around the margins and come up with short-term fixes. |
| Republicans have used these budget deadlines to gain political leverage over contentious policies. | Republicans have used these budget deadlines to gain political leverage over contentious policies. |
| The central issue this time round was Mr Obama's healthcare overhaul, with the Republican-controlled House of Representatives approving budgets eliminating its funding or delaying its central provisions. These were later rejected by the Senate. | The central issue this time round was Mr Obama's healthcare overhaul, with the Republican-controlled House of Representatives approving budgets eliminating its funding or delaying its central provisions. These were later rejected by the Senate. |
| This is the first partial shutdown the US has faced in 17 years. | This is the first partial shutdown the US has faced in 17 years. |
| How did it get so bad? | How did it get so bad? |
| Since the Democrats ceded control of the House of Representatives to the Republicans in 2010, budget fighting between the two parties has become commonplace, with significant outcomes to stalemates. | Since the Democrats ceded control of the House of Representatives to the Republicans in 2010, budget fighting between the two parties has become commonplace, with significant outcomes to stalemates. |
| Republicans took their victory in the 2010 elections as a sign that Americans were revolting against Mr Obama's Democratic agenda, and specifically, that Americans were unhappy with the Patient Protection and Affordable Care Act, or "Obamacare" as Republicans label it. | Republicans took their victory in the 2010 elections as a sign that Americans were revolting against Mr Obama's Democratic agenda, and specifically, that Americans were unhappy with the Patient Protection and Affordable Care Act, or "Obamacare" as Republicans label it. |
| Republicans vehemently rejected Mr Obama's efforts to overhaul completely the way healthcare is provided in the United States. | Republicans vehemently rejected Mr Obama's efforts to overhaul completely the way healthcare is provided in the United States. |
| Although past budget fights have included larger questions about the size and scope of the US government, this one has been very specifically about Mr Obama's healthcare law, substantial parts of which took effect on 1 October. | Although past budget fights have included larger questions about the size and scope of the US government, this one has been very specifically about Mr Obama's healthcare law, substantial parts of which took effect on 1 October. |
| Republicans have been doing everything in their power to force Mr Obama to delay implementation of a bill they strongly believe was rejected by the American public. | Republicans have been doing everything in their power to force Mr Obama to delay implementation of a bill they strongly believe was rejected by the American public. |
| Mr Obama and the Democrats, for their part, are keen to remind voters that the law was validated by the Supreme Court in June 2012 and was a central issue in the 2012 presidential election, which Mr Obama won decisively. | Mr Obama and the Democrats, for their part, are keen to remind voters that the law was validated by the Supreme Court in June 2012 and was a central issue in the 2012 presidential election, which Mr Obama won decisively. |
| House Republicans have already voted more than 40 times since the legislation was passed either to repeal it or to strip its funding. | House Republicans have already voted more than 40 times since the legislation was passed either to repeal it or to strip its funding. |
| Who has been affected by the shutdown? | Who has been affected by the shutdown? |
| Ten minutes before midnight on 30 September, the White House budget office issued orders for government offices to start shutting down, with workers told to stay at home without pay. | Ten minutes before midnight on 30 September, the White House budget office issued orders for government offices to start shutting down, with workers told to stay at home without pay. |
| While 700,000 of the 2.1 million-strong federal workforce were initially told to stay home, having been deemed "non-essential" staff, many are back on the job. | While 700,000 of the 2.1 million-strong federal workforce were initially told to stay home, having been deemed "non-essential" staff, many are back on the job. |
| On 7 October, Defence Secretary Chuck Hagel recalled most of the 350,000 Pentagon employees who had been sent home. And the Federal Aviation Administration has reinstated 800 workers. | On 7 October, Defence Secretary Chuck Hagel recalled most of the 350,000 Pentagon employees who had been sent home. And the Federal Aviation Administration has reinstated 800 workers. |
| It's not just government employees who have stopped working. Defence contractor Lockheed Martin said it would put 3,000 employees on unpaid leave, and United Technologies' said it would temporarily lay off 2,000 workers. | It's not just government employees who have stopped working. Defence contractor Lockheed Martin said it would put 3,000 employees on unpaid leave, and United Technologies' said it would temporarily lay off 2,000 workers. |
| Most national parks, museums, federal buildings and services are still closed. | |
| Pension and veterans' benefit cheques have been delayed. Death benefits paid to the families of soldiers recently killed abroad were initially suspended, but restored after a public outcry. | Pension and veterans' benefit cheques have been delayed. Death benefits paid to the families of soldiers recently killed abroad were initially suspended, but restored after a public outcry. |
| Fears about deadly flu outbreaks and unsafe food have mounted, as agencies that typically deal with tracking disease and inspecting food remain mostly dark. Thirty workers at the Centers for Disease Control and Prevention were brought back to work after a deadly outbreak of salmonella. | Fears about deadly flu outbreaks and unsafe food have mounted, as agencies that typically deal with tracking disease and inspecting food remain mostly dark. Thirty workers at the Centers for Disease Control and Prevention were brought back to work after a deadly outbreak of salmonella. |
| Child cancer patients have been turned away from drug trials, as doctors at the National Institutes of Health have had to suspend research. | Child cancer patients have been turned away from drug trials, as doctors at the National Institutes of Health have had to suspend research. |
| Air-traffic controllers, active military personnel, and border security guards have been deemed "essential" and are still working. | Air-traffic controllers, active military personnel, and border security guards have been deemed "essential" and are still working. |
| Workers like teachers, firefighters and doctors will continue to be paid, as they are paid for by individual state governments, not the federal government. | Workers like teachers, firefighters and doctors will continue to be paid, as they are paid for by individual state governments, not the federal government. |
| What is the likely economic impact? | What is the likely economic impact? |
| It depends on how long it takes for Congress to thrash out an agreement on the budget. | It depends on how long it takes for Congress to thrash out an agreement on the budget. |
| The US government has experienced 18 shutdowns in the past 30 years, with the previous one lasting 21 days under US President Bill Clinton in 1995, costing the economy over $1bn. | The US government has experienced 18 shutdowns in the past 30 years, with the previous one lasting 21 days under US President Bill Clinton in 1995, costing the economy over $1bn. |
| According to recent testimony by US Treasury Secretary Jack Lew, each week the government is shutdown, 0.25% is shaved off economic growth, which was already expected to be a sluggish 2% this quarter. | According to recent testimony by US Treasury Secretary Jack Lew, each week the government is shutdown, 0.25% is shaved off economic growth, which was already expected to be a sluggish 2% this quarter. |
| However, the daily impact of the economic shutdown may accelerate if it affects confidence and consumer spending, especially with hundreds of thousands of workers left unpaid. | However, the daily impact of the economic shutdown may accelerate if it affects confidence and consumer spending, especially with hundreds of thousands of workers left unpaid. |
| It will also affect government workers, who may have to dip into their savings or delay mortgage payments and other spending until unpaid leave ends. | It will also affect government workers, who may have to dip into their savings or delay mortgage payments and other spending until unpaid leave ends. |
| The real concern is if the shutdown spills over into mid-October, when the legislative branch has to agree on raising the federal government's borrowing authority. | The real concern is if the shutdown spills over into mid-October, when the legislative branch has to agree on raising the federal government's borrowing authority. |
| What's next? How will it be resolved? | What's next? How will it be resolved? |
| There are a few ways out of the shutdown: Congress could pass a clean bill on the budget that does not tamper with the Affordable Healthcare Act; the Senate and Democrats could accept changes in the health law; or a compromise could be reached. | There are a few ways out of the shutdown: Congress could pass a clean bill on the budget that does not tamper with the Affordable Healthcare Act; the Senate and Democrats could accept changes in the health law; or a compromise could be reached. |
| The Republican-led House has said it will introduce legislation to raise the nation's borrowing limit for six weeks, to give Congress more time to hash out a longer deal. | The Republican-led House has said it will introduce legislation to raise the nation's borrowing limit for six weeks, to give Congress more time to hash out a longer deal. |
| This legislation could include a resolution to the shutdown. | This legislation could include a resolution to the shutdown. |
| For many, raising the nation's borrowing limit before mid-October is key. | For many, raising the nation's borrowing limit before mid-October is key. |
| That is when the US government could default on its debts. | That is when the US government could default on its debts. |
| Congress will need to agree to raise the government's $16.7 trillion debt ceiling - the limit at which it can borrow money to pay its bills - by 17 October. | Congress will need to agree to raise the government's $16.7 trillion debt ceiling - the limit at which it can borrow money to pay its bills - by 17 October. |
| That is when the US Treasury has said it will exhaust the "extraordinary measures" it has been using to pay the nation's bills since the debt limit was hit in early May. | That is when the US Treasury has said it will exhaust the "extraordinary measures" it has been using to pay the nation's bills since the debt limit was hit in early May. |
| Paying back US creditors has been a central part of US governance since the time of the nation's founding. In 1790, US Treasury Secretary Alexander Hamilton said, "There can be no time, no state of things, in which Credit is not essential to a Nation." | Paying back US creditors has been a central part of US governance since the time of the nation's founding. In 1790, US Treasury Secretary Alexander Hamilton said, "There can be no time, no state of things, in which Credit is not essential to a Nation." |
| However, over the past three years, the debt ceiling has been used as a negotiation point for House Republicans who have sought to extract budget concessions from Mr Obama. | However, over the past three years, the debt ceiling has been used as a negotiation point for House Republicans who have sought to extract budget concessions from Mr Obama. |
| The biggest drama came in August 2011, when last-minute posturing by both sides led ratings agency Standard & Poor's to downgrade the credit worthiness of US debt, a historic first. | The biggest drama came in August 2011, when last-minute posturing by both sides led ratings agency Standard & Poor's to downgrade the credit worthiness of US debt, a historic first. |
| Should the world care? | Should the world care? |
| Yes and no. | Yes and no. |
| If the shutdown drags on, it could sink the world's largest economy into recession. That is not good for the rest of the world, which often depends on US consumers. | If the shutdown drags on, it could sink the world's largest economy into recession. That is not good for the rest of the world, which often depends on US consumers. |
| However, stock markets have responded relatively mildly since the shutdown went into force. | However, stock markets have responded relatively mildly since the shutdown went into force. |
| Although all three US indexes are down significantly since the shutdown began, news that a debt ceiling deal might be reached has sent them all higher. This shows that investors care primarily about a debt deal, not a federal budget. | Although all three US indexes are down significantly since the shutdown began, news that a debt ceiling deal might be reached has sent them all higher. This shows that investors care primarily about a debt deal, not a federal budget. |
| If, however, a debt deal is derailed, the prospects are grim. | If, however, a debt deal is derailed, the prospects are grim. |
| "There might be a financial crisis and recession that could echo the events of 2008 or worse," the US Treasury warned in a recent report. | "There might be a financial crisis and recession that could echo the events of 2008 or worse," the US Treasury warned in a recent report. |