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Federal government shut down as Congress remains deadlocked

Federal government shut down as Congress remains deadlocked

CLOSED FOR BUSINESS: Statues of female figures representing Grief and History stand before the U.S. Capitol Dome on the grounds of the U.S. Capitol in Washington Oct.1, 2013. Photo: Reuters/REUTERS/Jonathan Ernst

By Andy Sullivan and John Whitesides

WASHINGTON (Reuters) – Up to one million federal workers were thrown temporarily out of work on Tuesday as the U.S. government partially shut down for the first time in 17 years in a standoff between President Barack Obama and congressional Republicans over healthcare reforms.

The stalemate closed museums and national parks and slowed everything from trade negotiations to medical research, while sparking new questions about the ability of a deeply divided Congress to perform its most basic functions.

However, the standoff did not prevent the Obama administration from rolling out enrollment in health insurance marketplaces, the centerpiece of the most ambitious U.S. social program in five decades.

Republicans in the House of Representatives wanted to block Obama’s signature Affordable Care Act by tying continued government funding to measures that would undermine it. But the Democratic-controlled Senate repeatedly rejected those efforts.

In Washington, museums were closed to tourists and police erected barriers around landmarks like the Lincoln Memorial. The National Zoo shut off a popular “panda cam” that allowed visitors to view its newborn panda cub online.

“I think it’s outrageous. You know these guys are put into office to help the people, not to hurt them,” said federal worker Ronald Jackson, who commuted 55 miles in to work at the Treasury Department only to be sent home.

If Congress can agree to a new funding bill soon, the shutdown would last days rather than weeks, with relatively little impact on the world’s largest economy.

But the standoff continued on Capitol Hill as the Democratic-controlled Senate formally rejected an offer by House Republicans to break the logjam.

“This shutdown was completely preventable. It should not have happened,” Obama wrote in a letter to government employees.

Whether the shutdown represents another bump in the road for a Congress increasingly plagued by dysfunction or is a sign of a more alarming breakdown in the political process could be determined by the reaction among voters and on Wall Street.

The market appeared to be taking the closure in stride for now. U.S. stocks rose modestly as the S&P 500 .SPX edged up 0.8 percent and the Nasdaq Composite .IXIC gained 1.1 percent.

A week-long shutdown would slow U.S. economic growth by about 0.3 percentage points, according to Goldman Sachs, but a longer disruption could weigh on the economy more heavily as furloughed workers scale back personal spending.

The political crisis raised fresh concern about whether Congress can meet a crucial mid-October deadline to raise the government’s $16.7 trillion debt ceiling. Some Republicans see that vote as another opportunity to undercut Obama’s healthcare law.

Failure to raise the debt limit would force the country to default on its obligations, dealing a blow to the economy and sending shockwaves around global markets.

A 2011 standoff over the debt ceiling hammered consumer confidence and prompted a first-ever downgrade of the United States’ credit rating.

Analysts say this time it could be worse. Lawmakers back then were fighting over how best to reduce trillion-dollar budget deficits, but this time they are at loggerheads over an issue that does not lend itself to compromise as easily: an expansion of government-supported health benefits to millions of uninsured Americans.

Republicans have voted more than 40 times to repeal or delay “Obamacare,” but they failed to block the launch of its online insurance marketplaces on Tuesday. The program had a rocky start as government Web sites struggled to cope with heavy online traffic.

“What I’m hearing from my constituents at home is if this is the only way to stop the runaway train called the federal government, then we’re willing to try it,” said Texas Senator John Cornyn, the second-ranking Republican in the Senate.

After missing the Monday midnight (0400 GMT) deadline to avert the shutdown, Republicans and Democrats in the House continued a bitter blame game, each side shifting responsibility to the other in efforts to redirect a possible public backlash.

A Reuters/Ipsos poll showed about one-quarter of Americans would blame Republicans, 14 percent would blame Obama and 5 percent would blame Democrats in Congress, while 44 percent said everyone would be to blame.

But the shutdown battles of 1995 and 1996 didn’t substantially affect public’s opinion of then-Democratic President Bill Clinton or his main adversary, Republican House Speaker Newt Gingrich, the Gallup polling organization said.

POLITICAL POLARIZATION

This latest shutdown, the culmination of three years of divided government and growing political polarization, was spearheaded by Republicans associated with the conservative Tea Party movement united in their opposition to Obama, their distaste for the president’s healthcare law and their campaign pledges to rein in government spending.

“While I don’t want to shut down government and I would be for short term solutions to keep it open, I think we do sometimes have to take a stand and say: ‘Enough’s enough,’” Republican Senator Rand Paul, a leader of the Tea Party movement, said on CNN.

While some government offices and national parks were shuttered, spending for essential functions related to national security and public safety continued, including pay for U.S. military troops.

Though the impact was likely to be most apparent in the Washington region it will be felt across the country as the federal government maintains offices in every major city and parks and other facilities are spread across all 50 states.

Republican Senator John McCain, who has opposed his party’s efforts to link government spending to Obamacare, said his constituents were angry about the shutdown as landmarks in his home state of Arizona were closed to the public.

“People that had planned for months to go to the Grand Canyon” will be upset to find it closed, he told reporters.

Defense Secretary Chuck Hagel, visiting U.S. ally South Korea early Tuesday, warned that the shutdown would undermine American credibility abroad and lead allies to question the nation’s commitment to treaty obligations.

Some analysts said a brief government shutdown – and a resulting backlash against lawmakers – could cool Republican demands for a showdown over the debt limit.

Others said they were surprised that a shutdown hadn’t happened earlier.

“We have a divided government with such diametrically opposed views, we need a crisis to get any kind of results,” said Republican strategist John Feehery, a former Capitol Hill aide.

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