WASHINGTON - The US government was poised for its first partial shutdown in 17 years at 11am Thailand time Tuesday, after a weekend with no signs of negotiations or compromise from the Congress or the White House.
UPDATE: Early Tuesday Thailand time (Monday night in Washington), President Obama, stepped before TV news cameras to urge an end to the standoff. He then placed telephone calls to to Republican House Speaker John Boehner, Democratic Senate Majority Leader Harry Reid, Democratic House Minority Leader Nancy Pelosi and Republican Senate Minority Leader Mitch McConnell. But there was no breakthrough, a White House official said, and a shutdown appeared likely.
Republicans and Democrats say they don't want to close the government, though neither side is budging from their positions.
The two main figures in the budget dispute that threatens to shut down most US government operations at 11am Tuesday (Thailand time): House Speaker John Boehner, whose Republican Party insists on delaying the new US health care programme, Obamacare, for a year; and President Barack Obama, who says he won't even negotiate on that. (AP file photo)
House Republicans, led by Speaker John Boehner, want to delay President Barack Obama's Affordable Care Act, the health-care plan known as Obamacare, for a year and make other changes to the law. Democrats, led by Obama, say that won't happen.
Obama will meet with his cabinet Monday afternoon (early Tuesday morning, Thailand time) as agencies prepare for a shutdown. Obama planned to reiterate to reporters that he won't give in to Republican demands over the health law, according to an administration official who asked for anonymity to discuss White House strategy.
The debate is taking place in an atmosphere of total, personal financial security.
The salaries of Congress members, like the president, come from a pool of mandatory funds and aren't subject to the whims of lawmakers. If a shutdown happens, their cheques keep coming, no matter what.
As a report issued last week by the Congressional Research Service put it, "Due to their constitutional responsibilities and a permanent appropriation for congressional pay, members of Congress are not subject to furlough."
This cruel irony isn't lost on the federal workers who stand to lose pay but for an act of Congress, most of whose members earn $174,000 (about 5.4 million baht) a year.
Hanging in the balance are 800,000 federal workers who would be sent home if Congress fails to pass a stopgap spending bill before funding expires tonight.
"I'm afraid, based on what Speaker Boehner has said so far, that we are going to look at a shutdown," Representative Chris Van Hollen of Maryland, the top Democrat on the House Budget Committee, said on Bloomberg Television.
Stocks Fall
In a government shutdown, essential operations and programs 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 closure 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 email. The Treasury has said measures to avoid breaching the debt ceiling will be exhausted on Oct 17.
Greg Valliere, chief political analyst for Potomac Research Group Holdings in Washington, told Bloomberg Television that "a shutdown is not the issue" because default is more important.
"If we even talk about default, if we come within a day or two of default, that's a terribly negative story for the overall economy," he said.
Adding up a looming government shutdown and the potential for a default is "massive uncertainty for at least another month, and markets don't like uncertainty," he said.
Concern that a shutdown will stunt economic growth sent stocks lower Monday, trimming the biggest quarterly gain since the start of 2012, while Treasuries rallied and the Japanese yen strengthened before a potential shutdown. The Standard & Poor's 500 fell 0.5 per cent to 1,682.63 at 10:37am in New York (9:37 Monday night in Thailand).
Crude oil traded near its lowest level in three months. West Texas Intermediate oil fell as much as 1.7 per cent.
The fallout in US government services would be far-reaching. National parks and Internal Revenue Service call centres 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.
Public Sentiment
A Bloomberg National poll conducted Sept 20-23 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.
A CNN/ORC International poll conducted Sept 27-29 and released Monday said that 46 per cent of respondents would blame congressional Republicans for a shutdown, while 36 per cent would say the president was responsible.
The Senate was to convenes at 2pm Monday Washington time, almost certainly to reject the House's latest plan to delay Obamacare and repeal a tax on medical devices, and send back a temporary spending measure. The House is controlled by Republicans, the Senate by Democrats.
"I still hold out a small hope that Republicans will come to their senses," Senator Charles Schumer of New York, the chamber's third-ranking Democrat, said on a morning TV programme.
"There aren't any Republicans talking about shutdown," Senator John Thune, a South Dakota Republican, told Bloomberg Television's Peter Cook. "We want to fund the government."
Shift Blame
House Republicans said they'll respond by again asking for changes to Obamacare and spent the weekend 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 interview 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 with only Democratic Party votes.
House Republican leaders don't expect to have enough party support for a measure that only extends federal spending, according to a leadership aide who spoke on condition of anonymity to discuss strategy.
If that's what the Senate passes, a likely option for House Republicans to attach to the spending measure is a provision ending the government's contribution to health insurance for Congress members 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 on Sunday, and accused Democrats of wanting a standoff 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."
Latest Plan
The latest House plan, which passed after midnight Saturday night, would authorise 10 weeks of spending starting Oct 1 only if much of the Obama health law is delayed for a year.
The proposal opened the second round of volleys with the Senate. While House Republicans have moved slightly off their position, from defunding Obamacare to delaying most of its provisions, Democrats haven't budged in their support for the health law.
Texas Republican Senators John Cornyn and Ted Cruz criticised Senate Majority Leader Harry Reid, a Democrat, for not calling the Senate into session to consider the latest House proposal.
"There's no reason the Senate should be home on vacation," said Cruz, who last week spoke on the Senate floor for more than 21 hours to protest the health-care law.
The Senate can act quickly to pass legislation, if all 100 members agree. If a single member objects, it would block legislation from being passed for four days or more.
Republicans and Democrats began bracing for a shutdown by attempting to affix blame on the other side. It's at least the fourth time in the past three years that lawmakers have taken a budget battle to the brink of a fiscal crisis, each time averting the worst-case scenario just before or after the deadline.
"This has been the Congress of chronic chaos since day one, and this is just another episode," said Representative Steve Israel, a New York Democrat.