The US government has begun a partial shutdown after the two houses of Congress failed to agree a new budget, the BBC reports. The Republican-led House of Representatives insisted on delaying President Barack Obama’s healthcare reform – dubbed Obamacare – as a condition for passing a bill. More than 800,000 federal employees face unpaid leave with no guarantee of back pay once the deadlock is over. It is the first shutdown in 17 years and the dollar fell early on Tuesday.
Goldman Sachs estimates a three-week shutdown could shave as much as 0.9% from US GDP this quarter. The White House’s budget office began notifying federal agencies to begin an “orderly shutdown” as the midnight deadline approached.
Shortly after midnight, President Obama tweeted: “They actually did it. A group of Republicans in the House just forced a government shutdown over Obamacare instead of passing a real budget.”
House Speaker John Boehner told reporters he hoped the Senate would agree to a bipartisan committee known as a conference “so we can resolve this for the American people”. “The House has voted to keep the government open but we also want basic fairness for all Americans under Obamacare,” he said.
The Senate was expected to meet again at 09:30 (13:30 GMT) on Tuesday. Democrats were never likely to make concessions on healthcare reform – Mr Obama’s signature achievement and a central issue in last year’s presidential election, our correspondent says. But Republicans have made demands that they knew would not be met rather than be accused of weakness and betrayal by their own hardliners, he adds.
On Monday afternoon, the Democratic-led Senate voted 54-46 against a bill from House Republicans that would have funded the government only if President Obama’s healthcare law was delayed for a year.
A shutdown would have “a very real economic impact on real people, right away,” he said, adding it would “throw a wrench” into the US recovery. “The idea of putting the American people’s hard-earned progress at risk is the height of irresponsibility, and it doesn’t have to happen.” After the Senate vote, the chamber’s Democratic majority leader blamed Republicans for the imminent halt to all non-essential government operations.
The last shutdown, in the winter of 1995-96, severely damaged Republican election prospects, Al Jazeera reports. Republicans demanded then-President Bill Clinton agree to their version of a balanced budget. As lawmakers grappled with the latest shutdown, the 17 October deadline for extending the government’s borrowing limit looms even larger.