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US shutdown looms amid political stalemate over budget US shutdown looms amid political stalemate over budget
(about 2 hours later)
A US government shutdown looms as Democrat and Republican lawmakers remain unable to strike a deal on a new plan to continue funding its operation. A US government shutdown looms as Democratic and Republican lawmakers remain unable to strike a deal on a new plan to continue funding its operation.
If they fail to reach an agreement by midnight (04:00 GMT Tuesday), the US government will be forced to close all non-essential federal services.If they fail to reach an agreement by midnight (04:00 GMT Tuesday), the US government will be forced to close all non-essential federal services.
More than 700,000 staff could be sent home on unpaid leave, with no guarantee of back pay once the deadlock is over.More than 700,000 staff could be sent home on unpaid leave, with no guarantee of back pay once the deadlock is over.
The shutdown would be the first in the US for 17 years.The shutdown would be the first in the US for 17 years.
One of the key points of contention in the political stalemate has been President Barack Obama's healthcare law, popularly known as Obamacare.One of the key points of contention in the political stalemate has been President Barack Obama's healthcare law, popularly known as Obamacare.
Republicans in the House of Representatives - and their allies in the Senate - have demanded the law be repealed or stripped of funding as a condition for continuing to fund the government.Republicans in the House of Representatives - and their allies in the Senate - have demanded the law be repealed or stripped of funding as a condition for continuing to fund the government.
Major portions of the law, which passed in 2010 and has been validated by the US Supreme Court, are due to take effect on Tuesday.Major portions of the law, which passed in 2010 and has been validated by the US Supreme Court, are due to take effect on Tuesday.
In addition to the threat of a shutdown, a second fiscal deadline is approaching in the coming weeks. About 17 October, 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 demanded a series of policy concessions - notably on the president's health law and financial and environmental regulations - in exchange for raising the debt ceiling.
Although there were no reports that negotiations over either the budget or the debt ceiling were underway on Monday, Mr Obama said he was "not at all resigned" to a government shutdown.
But he warned there could not be "any kind of meaningful negotiations under the cloud of potential default" on the government's debt.
"Our currency is the reserve currency of the world," Mr Obama said after an Oval Office meeting with Israeli Prime Minister Benjamin Netanyahu.
"We don't mess with that. And we certainly don't allow domestic policy differences on issues that are unrelated to the budget to endanger not only our economy but the world economy."
Impact of shutdown
As the Democrats and Republicans vie for political advantage with the shutdown approaching, on Monday Republican House Speaker John Boehner criticised the Democratic-led Senate for remaining in recess on Sunday after the House passed its version of a budget bill.As the Democrats and Republicans vie for political advantage with the shutdown approaching, on Monday Republican House Speaker John Boehner criticised the Democratic-led Senate for remaining in recess on Sunday after the House passed its version of a budget bill.
"The House has done its work," he said."The House has done its work," he said.
"We passed a bill... The Senate decided not to work yesterday. My goodness, if there is such an emergency, where were they?""We passed a bill... The Senate decided not to work yesterday. My goodness, if there is such an emergency, where were they?"
Impact of shutdown
Early on Sunday, the Republican-run House of Representatives passed an amended version of the Senate spending bill that removed funding from the healthcare law and repealed a $29bn (£17.9bn) medical device tax.Early on Sunday, the Republican-run House of Representatives passed an amended version of the Senate spending bill that removed funding from the healthcare law and repealed a $29bn (£17.9bn) medical device tax.
US Senate Majority leader Harry Reid vowed that his Democrat-led chamber would reject the Republican bill. Democrats in the US Senate have vowed to reject any House bill that touches the health law.
"[On Monday], the Senate will do exactly what we said we would do and reject these measures," said Adam Jentleson, a spokesman for Mr Reid. Democratic Senator Barbara Boxer reaffirmed her party's pledge in the Senate to stop Republican efforts, saying "they cannot seem to stop themselves... so we will stop them."
"At that point, Republicans will be faced with the same choice they have always faced: put the Senate's clean funding bill on the floor and let it pass with bipartisan votes, or force a Republican government shutdown."
Speaking for the president, White House spokesman Jay Carney said: "Any member of the Republican Party who votes for this bill is voting for a shutdown." The president, he said, would also veto the Republican bill.Speaking for the president, White House spokesman Jay Carney said: "Any member of the Republican Party who votes for this bill is voting for a shutdown." The president, he said, would also veto the Republican bill.
If the government does shut down on 1 October, national parks and Washington's Smithsonian museums would close, pension and veterans' benefit cheques would be delayed, and visa and passport applications would go unprocessed.If the government does shut down on 1 October, national parks and Washington's Smithsonian museums would close, pension and veterans' benefit cheques would be delayed, and visa and passport applications would go unprocessed.
Programmes deemed essential, such as air traffic control and food inspections, would continue.Programmes deemed essential, such as air traffic control and food inspections, would continue.
The defence department has advised employees that uniformed members of the military will continue on normal duty, but that large numbers of civilian workers will be told to stay home.The defence department has advised employees that uniformed members of the military will continue on normal duty, but that large numbers of civilian workers will be told to stay home.
Borrowing crisisBorrowing crisis
The looming shutdown is not the only crisis the US government is facing. As lawmakers grapple with the impending shutdown, the 17 October deadline for extending the government's borrowing limit looms ever larger.
The US government and Republicans are also at loggerheads over extending the government's borrowing limit.
US Treasury Secretary Jack Lew has warned that the US will hit its debt ceiling by 17 October, leaving the government with half the money needed to pay its bills.
Earlier this month, Mr Lew said that unless the US was allowed to extend its borrowing limit, the country would be left with about $30bn (£18.5bn) to meet its commitments, which on certain days can be as high as $60bn.Earlier this month, Mr Lew said that unless the US was allowed to extend its borrowing limit, the country would be left with about $30bn (£18.5bn) to meet its commitments, which on certain days can be as high as $60bn.
A failure to raise the limit could also result in the US government defaulting on its debt payments.A failure to raise the limit could also result in the US government defaulting on its debt payments.
President Obama has warned that "failure to meet this responsibility would be far more dangerous than a government shutdown".President Obama has warned that "failure to meet this responsibility would be far more dangerous than a government shutdown".
Washington faced a similar impasse over its debt ceiling in 2011. Republicans and the Democrats only reached a compromise on the day the government's ability to borrow money was due to run out.Washington faced a similar impasse over its debt ceiling in 2011. Republicans and the Democrats only reached a compromise on the day the government's ability to borrow money was due to run out.
That fight was resolved just hours before the country could have defaulted on its debt, but nevertheless led to ratings agency Standard & Poor's downgrading the US for the first time ever.That fight was resolved just hours before the country could have defaulted on its debt, but nevertheless led to ratings agency Standard & Poor's downgrading the US for the first time ever.
The 2011 compromise included a series of automatic budget cuts known as the "sequester" which came into effect earlier this year.The 2011 compromise included a series of automatic budget cuts known as the "sequester" which came into effect earlier this year.
The US government has not experienced a shutdown since 1995-96, when services were suspended for a record 21 days.The US government has not experienced 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.Republicans demanded then-President Bill Clinton agree to their version of a balanced budget.
After weeks of negotiation, they reached a compromise similar to what they discussed prior to the shutdown.After weeks of negotiation, they reached a compromise similar to what they discussed prior to the shutdown.