WASHINGTON: For the first time in nearly two decades, the US government
staggered into a partial shutdown on Monday at midnight after
congressional Republicans stubbornly demanded changes in the nation's
healthcare law as the price for essential federal funding and President
Barack Obama and Democrats adamantly refused.
As Congress
gridlocked, Obama said a "shutdown will have a very real economic impact
on real people, right away", with hundreds of thousands of federal
workers furloughed and veterans' centres, national parks, most of the
space agency and other government operations shuttered.
He laid
the blame at the feet of House Republicans, whom he accused of seeking
to tie government funding to ideological demands, "all to save face
after making some impossible promises to the extreme right wing of their
party".
House Speaker John Boehner responded a short while
later on the House floor. "The American people don't want a shutdown and
neither do I," he said. Yet, he added, the new healthcare law "is
having a devastating impact. ... Something has to be done."
There are few issues Republicans feel as passionately about as the
healthcare reform, which they have dubbed "Obamacare". They see the plan
— intended to provide coverage for the millions of Americans now
uninsured — as wasteful and restricting freedom by requiring most
Americans to have health insurance.
The US stock market dropped on fears that political gridlock between the White House
and a Republican Party influenced by hardcore conservative tea party
lawmakers would prevail, though analysts suggested significant damage to
the national economy was unlikely unless a shutdown lasted more than a
few days.
A few minutes before midnight, White House budget
director Sylvia Burwell issued a directive to federal agencies to
"execute plans for an orderly shutdown". While an estimated 800,000
federal workers faced furloughs, some critical parts of the government —
from the military to air traffic controllers — would remain open.
Still, a shutdown would inconvenience millions of people who rely on
federal services or are drawn to the nation's parks and other
attractions.
Many low-to-moderate-income borrowers and
first-time homebuyers seeking government-backed mortgages could face
delays, and Obama said veterans' centres would be closed.
Some
critical services such as patrolling the borders and inspecting meat
would continue. Social security benefits would be sent, and the
government healthcare programmes for the elderly and poor would continue
to pay doctors and hospitals.
US troops were shielded from any
damage to their wallets when Obama signed legislation assuring the
military would be paid in the in the event of a shutdown.
The
state department would continue processing foreign applications for
visas, and embassies and consulates overseas would continue to provide
services to American citizens.
Any interruption in federal
funding would send divided government into territory unexplored in
nearly two decades. Then, Republicans suffered grievous political damage
and President Bill Clinton benefited from twin shutdowns in 1995 and
1996. Now, some Republicans said they feared a similar outcome.
If nothing else, some Republicans also conceded it was impossible to
use funding legislation to squeeze concessions from the White House on
health care. "We can't win," said Senator John McCain, the 2008
Republican presidential candidate.
On a long day and night in
the Capitol, the Senate torpedoed one Republican attempt to tie
government financing to changes in the health care law. House
Republicans countered with a second despite unmistakable signs their
unity was fraying — and Senate Democrats promptly rejected it, as well.
Defiant still, House Republicans decided to re-pass their earlier
measure and simultaneously request negotiations with the Senate on a
compromise. Some aides conceded the move was largely designed to make
sure that the formal paperwork was on the Senate's doorstep as the day
ended.
Whatever its intent, Senate Majority Leader Harry Reid
rejected it. "That closes government. They want to close government," he
said of House Republicans.
As lawmakers squabbled, Obama spoke
bluntly about House Republicans. "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," he said. Speaking
of the health care law that undergoes a major expansion on Tuesday, he
said emphatically, "That funding is already in place. You can't shut it
down."
There were some signs of fraying within Republican
ranks. For the first time since the showdown began more than a week ago,
there was public dissent from the Republican strategy that has been
carried out at the insistence of tea party-supported Republican House
members working in tandem with Republican Senator Ted Cruz of Texas.
Republican Representative Charles Dent said he was willing to vote for
stand-alone legislation that would keep the government running and
contained no healthcare-related provisions. "I would be supportive of
it, and I believe the votes are there in the House to pass it at that
point," the fifth-term congressman said.
Other Republicans
sought to blame Democrats for any shutdown, but Dent conceded that
Republicans would bear the blame, whether or not they deserved it.
Hours before the midnight deadline, the Senate voted 54-46 to reject a
proposal by House Republicans for a temporary funding bill that would
have kept the government open but would have delayed implementation of
the health care law for a year and permanently repeal a tax on medical
devices that helps finance it.
House Republicans countered by
scaling back their demands and seeking different concessions in exchange
for allowing the government to remain open. They called for a one-year
delay in a requirement in the healthcare law for individuals to purchase
coverage or face financial penalties.
The same measure also
would require members of Congress and their aides as well as the
president, vice president and the administration's political appointees
to bear the full cost of their own health care coverage by barring the
government from making the customary employer contribution.
The vote was 228-201, with a dozen Republicans opposed and nine Democrats in favour.
Unimpressed, Senate Democrats rejected the House measure on another 54-46 party line vote about an hour later.
Obama followed up his public remarks with phone calls to Boehner and
the three other top leaders of Congress, telling Republicans he would
continue to oppose attempts to delay or cut federal financing of the
health care law.
The prospect of a shutdown led US stocks to
sink as Wall Street worried the budget fight could lead to something
much worse for the economy — a failure to raise the nation's borrowing
limit.
Republicans are likely to take up the healthcare fight
again when Congress must pass a measure to increase the borrowing cap,
which is expected to hit its $16.7 trillion ceiling in mid-October.
Obama has vowed not to negotiate over the debt ceiling, noting that a
default would be worse for the economy than a partial government
shutdown.
The US risks a market-rattling, first-ever default on its obligations if Congress fails to raise that limit.
Both a shutdown and a default would be politically risky ahead of next year's congressional elections.
Some Republican leaders fear the public will blame their party for the
shutdown. But individual House members may face a greater risk by
embracing a compromise. Many represent heavily partisan congressional
districts, and voters in Republican primaries have ousted lawmakers they
see as too moderate.
Despite the government shutdown, a
crucial part of the health care plan takes effect: enrolment in new
healthcare exchanges that will enable millions of uninsured Americans to
purchase plans from private insurers, many of whom are eligible for
federal subsidies to reduce premiums. That's because most of the program
is paid from funds not subject to congressional appropriations.
