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WASHINGTON. — The US government stands poised for its first partial shutdown in 17 years at midnight tonight, after a weekend with no signs of negotiations or compromise from either the House or Senate to avert it.
Republicans and Democrats in Congress say they don’t want a shutdown, though neither side is budging from their positions to avoid one. House Republicans want to delay President Barack Obama’s Affordable Care Act for a year and make other changes to the health law. The Democrats vow not to let that happen.
Hanging in the balance are 800 000 federal workers who would be sent home tomorrow if Congress fails to pass a stop-gap spending bill before funding expires tonight. Standard & Poor’s 500 Index futures slid and Asian stocks retreated on concern of a shutdown, while Treasuries advanced.
Asked yesterday if he thought the government would shut down, Illinois Senator Richard Durbin, the chamber’s No. 2 Democrat, said: “I’m afraid I do.”
“We know what is going to happen,” Durbin said on CBS’s “Face the Nation” programme. “We are going to face the prospect of the government shutting down.”
The fallout would be far-reaching: national parks and Internal Revenue Service call centrers probably would close. Those wanting to renew passports would have to wait and the backlog of veterans’ disability claims could increase.
The political implications are much less clear. Democrats are painting Republicans as obstructionists who are trying to undo a law passed by Congress and upheld by the Supreme Court. Republicans say they are trying to save Americans from the effects of Obamacare and that Democrats won’t negotiate.
A Bloomberg National poll conducted shows Americans narrowly blame Republicans for what’s gone wrong in Washington, just as they did when the government closed in 1995 and 1996 — two of the 17 times US funding stopped since 1977.
The Senate convened at 2pm yesterday and was set to reject the House’s latest plan to delay Obamacare and repeal a tax on medical devices, and send back a temporary spending measure. House Republicans said they’ll respond by again asking for changes to Obamacare and spent yesterday trying to shift blame for a shutdown to the Democrats.
Representative Kevin McCarthy of California, the No. 3 House Republican, didn’t rule out the possibility of passing a spending measure that lasts a few days to give the parties time to negotiate — if Democrats are prepared to go along with some Republican efforts to trim back Obamacare.
“We will not shut the government down,” McCarthy said on the “Fox News Sunday” programme. “If we have to negotiate a little longer, we will continue to negotiate.”
Even that option seemed unlikely, as Democrats have said they aren’t interested in changes to Obamacare, first passed by Congress in 2010.
House Republican leaders don’t expect to have enough Republicans who support a measure that only extends federal spending, according to a leadership aide who spoke on condition of anonymity to discuss party strategy.
If that’s what the Senate passes today, a likely option for House Republicans to attach to the spending measure is a provision ending the government’s contribution to health insurance for members of Congress and their staffs, the aide said.
Trying to push Senate Democrats into action, about 20 House Republicans gathered in front of the Senate side of the US Capitol and accused Democrats of wanting a shutdown to score political points.
“This is the old football strategy,” Representative Tim Griffin, an Arkansas Republican, said holding a football. “When you get to where you want to be in a football game, you run out the clock.”
In a government shutdown, essential operations and programmes with dedicated funding would continue. That includes mail delivery, air-traffic control and social security payments.
A shutdown could reduce fourth-quarter economic growth by as much as 1,4 percentage points, depending on its duration, according to economists. The biggest effect would come from the output lost from furloughed workers.
A brief government shutdown won’t lead to any significant change of the Treasury Department’s forecast for when the US will breach the debt limit, a Treasury spokeswoman said in an e-mail. The Treasury has said measures to avoid breaching the debt ceiling will be exhausted on October 17.
US government securities rallied in Asian trading, with yields on benchmark 10-year notes slipping to 2,598 percent as of 2:34pm in Tokyo, from 2,625 percent late last week. The MSCI Asia Pacific Index lost 1,1 percent, and S&P 500 futures sank 0,7 percent.
“Concern about the effect on the global economy is being taken up by the markets,” Japanese Chief Cabinet Secretary Yoshihide Suga told reporters in Tokyo. Suga said that while there was no immediate effect on the economy from the shutdown 17 years ago, he hoped “there will be a swift resolution to the problem”. — Bloomberg.
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