October 1, 2013

US begins shutdown amid budget row


The US government has begun a partial shutdown after the two houses of Congress failed to agree a new budget.

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 is to meet again at 09:30 (13:30 GMT) on Tuesday.

The BBC's Mark Mardell in Washington says the divide in US politics has grown so bitter that government itself cannot function.

Who is affected?

State department will be able to operate for limited time
Department of defence will continue military operations
Department of education will still distribute $22bn (£13.6bn) to public schools, but staffing is expected to be severely hit
Department of energy - 12,700 staff expected to be sent home, with 1,113 remaining to oversee nuclear arsenal
Department of health and human services expected to send home more than half of staff
The Federal Reserve, dept of homeland security, and justice dept will see little or no disruption
US Postal Services continue as normal
Smithsonian institutions, museums, zoos and many national parks will close

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