Shutdown clock runs out, no winner
Washington (CNN) — The game of chicken failed. Neither side blinked. Now millions will pay the price.
Americans watched a colossal failure by Congress overnight and the shutdown of their government.
For weeks, the House and the Senate blamed and bickered, each claiming they’re standing up for what the public wants.
In the end, it led to the one outcome nobody wanted — one that will stop 800,000 Americans from getting paid and could cost the economy about $1 billion a week.
“Agencies should now execute plans for an orderly shutdown due to the absence of appropriations,” the Office of Management & Budget said in a note it sent to federal employees.
This is the first time the government has shut down in nearly 18 years. The last time it did, the stalemate lasted 21 days.
Now, the Republican-controlled House and the Democrat-controlled Senate will try to see if they can reconcile their two versions of the spending plan at the heart of the issue. So far, each has refused to budge.
House Republicans insist the spending plan for the new fiscal year include anti-Obamacare amendments. Senate Democrats are just as insistent that it doesn’t.
Obamacare, as President Barack Obama’s signature healthcare plan is known, isn’t directly tied to funding the government. But it’s so unpopular among a group of Republicans that they want it undercut, if not outright repealed.
“Healthcare law is the most insidious law known to man,” Republican Rep. Todd Rokita of Indiana said.
Democratic Sen. Bob Menendez, the chairman of the Senate Foreign Relations Committee, said the shutdown gives the United States a black eye.
“It is a dangerous message to the world,” he said. “We tell other nations that we believe that they have to have certain disciplines. And yet, we cannot ultimately keep our own budget open and the nation and its government functioning.”
Amid the finger-wagging and fulminating, the new health insurance went into effect on schedule Tuesday.
“The Affordable Care Act is moving forward. You can’t shut it down,” said a post on Barack Obama’s verified Twitter feed.
About an hour after the shutdown began at 12:01 a.m. ET Tuesday, House members voted to once again tack on the anti-Obamacare amendments that the Senate has said is a deal-breaker. They also requested a conference with the Senate to work out their differences.
But Senate Majority Leader Harry Reid has already said he wouldn’t agree to such a meeting until the House presents a clean spending bill stripped of the amendments.
“We will not go to conference with a gun to our head,” Reid said late Monday night.
The Senate will convene at 9:30 a.m. ET Tuesday, where it will once again reject the House amendments. The House wants to delay the requirement that everyone gets health insurance.
This is how it’s gone for more than a week: The House sends a version of the bill with provisions the Senate finds objectionable; the Senate kicks it back. The House sends it again; the Senate kicks it back again.
While Congress could pass a temporary funding measure as they work out their differences, there are no signs of any discussion along those lines right now.
House Speaker John Boehner held a press conference overnight saying he hopes the Senate will agree to meet.
When asked if he had a message for the 800,000 furloughed employees — or if he has a plan to restore back pay to them — Boehner responded, “The House has voted to keep the government open, but we also want basic fairness for all Americans under Obamacare.”
He then walked away from the podium.
A blow to the economy
The shutdown won’t happen all at once. The federal government is the country’s largest employer.
Federal employees who are considered essential will continue working. Those deemed non-essential — more than 800,000 — will be furloughed, unsure when they’ll be able to work or get paid again. Most furloughed federal workers are supposed to be out of their offices within four hours of the start of business Tuesday.
The shutdown could cost the still-struggling U.S. economy about $1 billion a week in pay lost by furloughed federal workers. And that’s only the tip of the iceberg.
While many agencies have reserve funds and contingency plans that would give them some short-term leeway, the economic loss would snowball as the shutdown continued.
The total economic impact is likely to be at least 10 times greater than the simple calculation of lost wages of federal workers, said Brian Kessler, economist with Moody’s Analytics. His firm estimates that a three- to four-week shutdown would cost the economy about $55 billion.
Initial market reaction around the world was muted early Tuesday morning.
Lisa Buckley, who co-owns the Denver-based American Automation security firm, counts on government contracts for 60% of her business. She’s worried about how she’ll pay her employees if the shutdown drags on.
“It’s quite irresponsible how the government has been running the country,” Buckley said. “If I ran my business like Congress has been handling the budget, I’d lose my job.”