Political gridlock between the White House and Republicans leads to the first shutdown of congress in nearly two decades, with Barack Obama warning “real people” will feel the impact “right away”.
Congress shut down at midnight in the US after Democrats and Republicans failed to meet the deadline to approve the funding budget for government over the next fiscal year, which began on Tuesday.
The White House ordered federal agencies to suspend a vast array of activities shortly before midnight.
It (shutdown)would throw a wrench into the gears of our economy at a time when those gears have started to gain traction. Barack Obama
Hundreds of thousands of federal workers were put on temporary unpaid leave, and veterans’ centres, national parks, most of the space agency and government departments temporarily closed.
Some “essential” areas, such an immigration checks and policing, are unaffected. Military personnel also continue to be paid, following new legislation signed by the president for such an incident.
President Obama said: “Shutdown will have a very real economic impact on real people, right away.
“It would throw a wrench into the gears of our economy at a time when those gears have started to gain traction.”
The US stock market also showed nerves about the impact on the economy, dropping on the fears of the damage that may be done.
However, analysts have suggested significant damage to the national economy was unlikely unless a shutdown lasted more than a few days.
The gridlock came as Republicans in congress demanded changes to the national health care law, dubbed “Obamacare”, as a price for the essential funding.
In the House, Republicans have passed a bill to delay the affordable care act for a year, and repeal a tax that helps to pay for it. They insisted these measures were an essential part of approving federal funding.
The Democrats disagreed, and did not back down.
President Obama has accused the Republicans of trying to “fight the election again”, and holding the government “to ransom”. He said it was driven by promises that Republicans had made to the Tea Party.
Republicans in the House of Representatives said they planned to appoint a set of negotiators to come to a resolution with a group of senators. However, there was no suggestion that the Republican stance would change with regards to healthcare.
Senate majority leader Harry Reid, a Democrat, rejected the move, saying Democrats would not negotiate until the House agreed to extend government funding by several weeks.
“We like to resolve issues, but we will not go to conference with a gun to our head,” Mr Reid said. Republicans denounced Senate Democrats for refusing to negotiate.
The US last faced a government shutdown under the Clinton administration in 1996. Bill Clinton’s popularity suffered as a result of that incident, but who will take the public’s blame if this shutdown continues remains to be seen.