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| Obama warns of economic toll in last-minute shutdown appeal | |
| (about 2 hours later) | |
| A shutdown of the US federal government, the first in nearly two decades, was looming close on Monday night as Congress careered toward a midnight deadline with little prospect of a deal to avert the crisis caused by a determined bloc of rightwingers in the House of Representatives. | A shutdown of the US federal government, the first in nearly two decades, was looming close on Monday night as Congress careered toward a midnight deadline with little prospect of a deal to avert the crisis caused by a determined bloc of rightwingers in the House of Representatives. |
| Despite a second rejection by Senate Democrats, Republicans in the House stepped up their efforts to use the funding bill to unpick Barack Obama's healthcare reforms – this time taking aim at insurance benefits for Congress and White House staffers. A resolution that included a measure to force them to buy health insurance on the exchanges set up by the Affordable Care Act was passed by 228 votes to 201. The resolution was certain to be rejected by the Senate. | |
| With hours to go before the deadline and both sides increasingly focused on who was to blame, Barack Obama made a last-minute plea to House Republicans to pass a so-called "clean" continuing resolution, saying they were on the brink of bringing the entire economy to a halt for ideological reasons. | With hours to go before the deadline and both sides increasingly focused on who was to blame, Barack Obama made a last-minute plea to House Republicans to pass a so-called "clean" continuing resolution, saying they were on the brink of bringing the entire economy to a halt for ideological reasons. |
| "Time is running out. My hope and expectation is that in the 11th hour once again, that Congress will choose to do the right thing, and that the House or Republicans in particular will do the right thing," he said. | "Time is running out. My hope and expectation is that in the 11th hour once again, that Congress will choose to do the right thing, and that the House or Republicans in particular will do the right thing," he said. |
| 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. | 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. |
| Without a deal, about 800,000 workers at government agencies such as national parks, museums, the tax collection service and Nasa would be sent home. Many were told that their wages could be delayed and they might not be able to work on Tuesday. | Without a deal, about 800,000 workers at government agencies such as national parks, museums, the tax collection service and Nasa would be sent home. Many were told that their wages could be delayed and they might not be able to work on Tuesday. |
| The defence secretary, Chuck Hagel, on a visit to South Korea, wrote to all department personnel, saying: "It would be irresponsible on our part not to prepare for the possibility of a shutdown – especially given that we don't know what Congress will do over the next 24 hours. Whatever happens, we will be prepared." | The defence secretary, Chuck Hagel, on a visit to South Korea, wrote to all department personnel, saying: "It would be irresponsible on our part not to prepare for the possibility of a shutdown – especially given that we don't know what Congress will do over the next 24 hours. Whatever happens, we will be prepared." |
| For the first time, Obama spoke in detail of the human toll of a shutdown, laying out the consequences of a shutdown of federal agencies, particularly for the two million civilian workers and 1.4 million military personnel on duty. | For the first time, Obama spoke in detail of the human toll of a shutdown, laying out the consequences of a shutdown of federal agencies, particularly for the two million civilian workers and 1.4 million military personnel on duty. |
| "In the event of a government shutdown, hundreds of thousands of these dedicated public servants who stay on the job will do so without pay. And several hundred thousands more will be immediately and indefinitely furloughed without pay – what of course will not be furloughed are the bills they have to pay." | "In the event of a government shutdown, hundreds of thousands of these dedicated public servants who stay on the job will do so without pay. And several hundred thousands more will be immediately and indefinitely furloughed without pay – what of course will not be furloughed are the bills they have to pay." |
| He said people social security would still receive their cheques and people on medicare would still be able to see their doctor. "Office buildings would close, paychecks would be delayed, vital services that seniors and veterans, women and children, business and our economy depend on would be hamstrung," he said. | He said people social security would still receive their cheques and people on medicare would still be able to see their doctor. "Office buildings would close, paychecks would be delayed, vital services that seniors and veterans, women and children, business and our economy depend on would be hamstrung," he said. |
| Air traffic control workers, prison guards and border patrol agents would remain in pots, but their paychecks would be delayed. Nasa would shutdown almost entirely, although some staff would remain at mission control to support astronauts currently in space. | Air traffic control workers, prison guards and border patrol agents would remain in pots, but their paychecks would be delayed. Nasa would shutdown almost entirely, although some staff would remain at mission control to support astronauts currently in space. |
| "Tourists will find every one of America's national parks and monuments, from the Yosemite, to the Smithsonian to the statue of liberty, immediately closed," he added. "Everyone's mail will still be delivered, and government operations relating to national security or public safety will go on." | "Tourists will find every one of America's national parks and monuments, from the Yosemite, to the Smithsonian to the statue of liberty, immediately closed," he added. "Everyone's mail will still be delivered, and government operations relating to national security or public safety will go on." |
| On Capitol Hill, the mood was deadlocked. Senator David Vitter, who originally came up with the idea to target congressional workers, admitted the side-swipe at Capitol Hill staff was partly a negotiating tactic designed to embarrass opponents. | |
| "Rule one in a democracy is that Washington is treated like the rest of America and has no special subsidy," he told reporters. "If in a day or two's time, the Democrats are refusing to fund to government only because of this, we will be on firmer ground." | "Rule one in a democracy is that Washington is treated like the rest of America and has no special subsidy," he told reporters. "If in a day or two's time, the Democrats are refusing to fund to government only because of this, we will be on firmer ground." |
| But Senate majority leader Harry Reid continued to demand that the House pass a continuing budget resolution without any Obamacare strings attached. | But Senate majority leader Harry Reid continued to demand that the House pass a continuing budget resolution without any Obamacare strings attached. |
| Earlier on Monday afternoon, the Senate voted along party lines to reject previous House demands for a one-year delay to Obamacare and repeal of taxes that would pay for it. | Earlier on Monday afternoon, the Senate voted along party lines to reject previous House demands for a one-year delay to Obamacare and repeal of taxes that would pay for it. |
| It is expected to do the same once the House passes the Vitter amendment, all but guaranteeing that the midnight deadline will pass without any congressional agreement on passage of the spending resolution. | It is expected to do the same once the House passes the Vitter amendment, all but guaranteeing that the midnight deadline will pass without any congressional agreement on passage of the spending resolution. |
| The White House briefly appeared to offer an olive branch, announcing that President Obama would meet the speaker of the House, 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. | The White House briefly appeared to offer an olive branch, announcing that President Obama would meet the speaker of the House, 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. | "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. | 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. | 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. |
| 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. | 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 stripped out the healthcare law rider and send back a "clean" budget bill to the House. | 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 stripped out the healthcare law rider and send back a "clean" budget bill to the House. |
| 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. | 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. |
| 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." | 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. | 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. |
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