The US government began a partial shutdown today (1 October), potentially putting up to 1 million workers on unpaid leave, closing national parks and stalling medical research projects. Consular services could also be affected, causing difficulties to nationals of five EU countries still subject to US visa requirements.
Federal agencies were directed to cut back services after lawmakers could not break a political stalemate that sparked new questions about the ability of a deeply divided Congress to perform its most basic functions.
After House Republicans floated a late offer to break the logjam, Senate Majority Leader Harry Reid rejected the idea, saying Democrats would not enter into formal negotiations on spending "with a gun to our head" in the form of government shutdowns.
After missing the midnight 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.
If Congress can agree to a new funding bill soon, the shutdown could last days rather than weeks. But no signs emerged of a strategy to bring the parties together.
The political dysfunction at the Capitol also raised fresh concerns about whether Congress can meet a crucial mid-October deadline to raise the government's $16.7 trillion (€12.3 trillion) debt ceiling.
With an eye on the 2014 congressional elections, both parties tried to deflect responsibility for the shutdown. President Barack Obama accused Republicans of being too beholden to Tea Party conservatives in the House of Representatives and said the shutdown could threaten the economic recovery.
The political stakes are particularly high for Republicans, who are trying to regain control of the Senate next year. Polls show they are more likely to be blamed for the shutdown, as they were during the last shutdown in 1996.
"Somebody is going to win and somebody is going to lose," said pollster Peter Brown of the Quinnipiac University poll. "Going in, Obama and the Democrats have a little edge."
The shutdown, the culmination of three years of divided government and growing political polarization, was spearheaded by Tea Party conservatives united in their opposition to Obama, their distaste for Obama's healthcare law and their campaign pledges to rein in government spending.
Obama refused to negotiate over the demands and warned a shutdown could "throw a wrench into the gears of our economy."
Some government offices and national parks will be shuttered, but spending for essential functions related to national security and public safety will continue, including pay for U.S. military troops.
The State Department could continue processing foreign applications for visas and U.S. applications for passports, since fees are collected to finance those services. Embassies and consulates overseas would continue to provide services to American citizens.
However, the State Department warned this week that consular operations at home and abroad would only remain open as long as "there are sufficient fees to support operations", NBC reported.
Between 20-30,000 applications for visas went unprocessed each of the 27 days the government was halted in the mid-90s, according to the Congressional Research Service. Nearly 200,000 U.S. applications for passports went unprocessed, causing millions of dollars in losses for U.S. tourism industries and airlines, according to the report.
Of the 28 EU member countries, the citizens of 23 do not need to acquire a US visa to visit the country, but are required to get an electronic authorisation. The citizens of Bulgaria, Croatia, Cyprus, Romania and Poland still require US visas.
In the hours leading up to the deadline, the Democratic-controlled Senate repeatedly stripped measures passed by the House that tied temporary funding for government operations to delaying or scaling back the healthcare overhaul known as Obamacare. The Senate instead insisted on funding the government through 15 November without special conditions.
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.
A Reuters/Ipsos poll showed about one-quarter of Americans would blame Republicans for a shutdown, 14% would blame Obama and 5% would blame Democrats in Congress, while 44% said everyone would be to blame.
The potential fallout has some Republican Party leaders worried ahead of the 2014 mid-term elections and the 2016 presidential race, particularly given the Republican divisions over the shutdown.
Republican Senator Ted Cruz of Texas, who commandeered the Senate floor for 21 hours last week to stoke the confrontation and urge House colleagues to join him, sparked a feud with fellow Republicans who disagreed with the shutdown and accused the potential 2016 presidential candidate of grandstanding.
"Whether or not we're responsible for it, we're going to get blamed for it," King told reporters on Monday. "They've locked themselves into a situation, a dead-end that Ted Cruz created."
It was unclear how long the shutdown would last and there was no clear plan to break the impasse. The Senate on Tuesday planned to recess until 9:30 a.m., at which time Democrats expect to formally reject the House of Representatives' latest offer for funding the government.
The shutdown will continue until Congress resolves its differences, which could be days or months. But the conflict could spill over into the more crucial dispute over raising the federal government's borrowing authority.
A failure to raise the $16.7 trillion debt ceiling would force the country to default on its obligations, dealing a potentially painful blow to the economy and sending shockwaves around global markets.
Some analysts said a brief government shutdown – and a resulting backlash against lawmakers – could cool Republican demands for a showdown over the debt limit.
"A lot of this is political theater. It's not about real policy. Part of this is taking a stand for their constituents," said Julian Zelizer, a historian at Princeton University.
"If there is fallout from a shutdown and there is a big enough shock, maybe they will be willing to move on to other issues," he said.
Obama says negotiating over the demands would only encourage future confrontations, and Democrats are wary of passing a short-term funding bill that would push the confrontation too close to the deadline for raising the debt ceiling.
"The bottom line is very simple – you negotiate on this, they will up the ante for the debt ceiling," Democratic Senator Chuck Schumer said.
A closure would have far-reaching consequences at federal agencies dealing with everything from sending out Social Security checks to collecting admission fees at national parks.
Here is a roundup of how the impact would be felt:
- Federal workers: As many as 1 million U.S. federal employees could face unpaid furloughs or payless paydays.
- National parks: National parks would close, meaning a loss of 750,000 daily visitors and an economic loss to gateway communities of as much as $30 million for each day parks are shut.
- Defense department: All military personnel would continue on normal duty status, but many civilian employees would be temporarily furloughed.
- Internal revenue service: Most of the federal tax agency's 90,000 employees would be furloughed..
- Justice department: Fewer than 18,000 of the department's 114,486 employees would be furloughed, and if the furlough is prolonged, some of those could be brought back to work. Courts: The U.S. Supreme Court would probably operate normally, as it has during previous shutdowns, but a spokesman declined to share the high court's plans.
- U.S. trade representative’s office: Already squeezed by automatic spending cuts imposed by so-called sequester, the USTR office has cut back on travel to the 41 countries where there are concerns about intellectual property.