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US shutdown looms as Congress squabbles

The US government is teetering on the brink of a partial shutdown that will curtail all but essen...
Newstalk
Newstalk

15.57 30 Sep 2013


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US shutdown looms as Congress...

US shutdown looms as Congress squabbles

Newstalk
Newstalk

15.57 30 Sep 2013


Share this article


The US government is teetering on the brink of a partial shutdown that will curtail all but essential services, with no compromise in sight in a deeply polarised Congress.

If the Democrats and Republicans fail to find a solution before the deadline on a new spending bill, the shutdown goes into force at 12.01am on Tuesday.

The federal funding bill is usually considered routine business, but this time the measure is tied to the highly controversial health care law promoted by President Barack Obama. It would be the first shutdown in 17 years.

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While essential services would remain in place, nearly a million government employees will be forced off work without pay, and museums and national parks will close.

National parks and the capital's Smithsonian museums will be closed, pension and benefits cheques will be stopped and passport applications will not be processed.

The healthcare law was passed by Congress and signed into law by President Barack Obama in 2010, despite opposition by the Republican Party, especially Tea Party conservatives. The Republican-dominated House has passed a funding bill that would delay the full effect of the healthcare law by one year.

But the Senate, controlled by the Democrats, has promised to reject the bill when it reconvenes later - resulting in a stalemate.

"To be absolutely clear, the Senate will reject both the one-year delay of the Affordable Care Act and the repeal of the medical device tax," Senate Majority Leader Harry Reid said.

"After weeks of futile political games from Republicans, we are still at square one."

The Bill is tied to a highly controversial health care law promoted by Barack Obama

With a solution looking increasingly elusive, the blame game has begun on Capitol Hill.

A Tea Party leader, Senator Ted Cruz, pointed the finger at Senate Democrats. "The House has twice now voted to keep the government open. And if we have a shutdown, it will only be because when the Senate comes back, Harry Reid says, 'I refuse even to talk,'" said Mr. Cruz, who led a 21-hour talkathon against Obamacare".

White House spokesman Jay Carney said the "Republicans decided they would rather make an ideological point by demanding the sabotage of the healthcare law".

The expected shutdown is jolting markets world-wide.

The New York Times said Mark Zandi, the chief economist for Moody's Analytics, estimated that a partial shutdown would trim annual economic growth by 0.2 percentage points in the fourth quarter, even if it ended within four days.

An impasse of a month could cut growth by 1.4 percentage points. Mr. Zanda estimated that an interruption longer than two months "would likely precipitate another recession".

The last time the federal government shutdown was under President Bill Clinton, when services ground to a halt for 28 days between December 1995 and January 1996. It nearly happened again in April 2011.

President Obama used his weekly address to talk about the situation.


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