Government Shuts Down as Congress Misses Deadline 10-02

Government Shuts Down as Congress Misses Deadline

Senate Rejects House Bill to Delay Part of Health Law; Obama Gives Notice to Workers

President Barack Obama told the country’s military in a video from the White House early Tuesday that he would lean on Congress to reopen the government as soon as possible.

WASHINGTON—After three years of ducking crises with last-minute deals, Congress finally ran out of ways to patch over its differences. Unable to meet a midnight Monday deadline for funding the government, lawmakers allowed it to shut down.

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Associated Press

President Barack Obama speaks at the White House on Monday evening.

The White House ordered   federal agencies to suspend a vast array of activities   shortly before midnight, after a day of frantic legislative volleying left Senate Democrats and House Republicans at an impasse overgovernment spending and the 2010health-care law. The next steps to resolve the stalemate remained unclear.

House Speaker John Boehner spoke to reporters on Capitol Hill shortly after the government-shutdown deadline took effect, saying it wasn’t House Republicans’ intention to shut down the government, and that the House had voted to keep the government open. Photo: Reuters

In response to an impending government shutdown, President Barack Obama said on Monday that it could be prevented if the House follows suit with the Senate and funds the government without controversial demands.

Markets that have slipped recently face a test Tuesday, given that a larger deadline for Congress—over the need to raise the nation's borrowing limit—is less than a month away.

Government Shuts Down

With no budget deal reached in Congress by the midnight deadline, the government shutdown was felt throughout the country Tuesday, from closed museums and national parks to the furloughing of employees deemed non-essential.

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A sign announced the closure of the Statue of Liberty, a U.S. National Park, in Battery Park, New York, .

Many federal workers reporting to their agencies Tuesday morning will undertake a half-day of shutdown preparations before more than 800,000 employees in the government's workforce of about 2.9 million are sent home. While essential functions  such as law enforcement and air-traffic control will continue, a large number of federal activities, among them Internal Revenue Service audits and surveillance for flu outbreaks, will be suspended.

"Unfortunately, Congress has not fulfilled its responsibility. It has failed to pass a budget and, as a result, much of our government must now shut down until Congress funds it again,'' PresidentBarack Obama   said in a video message to military and defense personnel around the world.

He added that personnel in uniform would remain on duty. "The threats to our national security have not changed, and we need you to be ready for any contingency,'' he said.

On Capitol Hill, a day of rapid-fire legislative maneuvering between Senate Democrats and House Republicans over the terms of a short-term spending bill collapsed late Monday. House Republicans said they planned to appoint a set of negotiators to work out a budget resolution with a small group with senators. But the GOP move came with no concessions on the party's central demand—that Democrats agree to scale back the new federal health law—and it brought lawmakers no closer to reaching a budget deal.

Congress finally ran out of ways to patch over its differences. Unable to meet a midnight Monday deadline for funding the government, lawmakers allowed it to shut down. Colleen McCain Nelson reports. Photo: Getty Images.

Senate Majority Leader Harry Reid  (D., Nev.) rejected the move, saying he wouldn't enter negotiations until the House agreed to reopen the government by extending its funding for several weeks. "We like to resolve issues, but we will not go to conference with a gun to our head," Mr. Reid said on the Senate floor.

Republicans denounced Senate Democrats for refusing to negotiate. "Our hope this evening is we will be able to put reasonable people in a room," said House Rules Committee Chairman Pete Sessions (R., Texas).

The first partial federal shutdown since 1996 came amid a fight that was less over spending levels than over the federal health-care law championed by Democrats, the Affordable Care Act. Driven by a set of combative Republican conservatives, the GOP-led House moved a series of bills to fund federal agencies for several weeks while delaying the start of the health law or stripping it of funding.

The Senate rejected each one, saying Democrats wouldn't negotiate changes to the health law as a condition of funding the government.

It was a clear indication that in an era of divided government, Congress is proving increasingly unable to fulfill its basic job of setting budget and spending priorities.

Markets in Asia on Tuesday morning sold off modestly as the deadline for a U.S. government shutdown passed, while the dollar declined slightly in Asia trading. Stocks sold off across the globe on Monday.

The coming days will likely be marked by intense political maneuvering, with both sides trying to seek political advantage. Polls suggest the GOP would bear the blame for any repercussions, but Republicans believe that Democrats will face political risk as well, because they are defending a health-care law that remains unpopular in many quarters.

In their final exchange, in the waning hours before Monday's deadline, the House passed by a 228-201 vote a short-term spending measure that would have funded agencies through mid-December while delaying for one year the law's requirement that most individuals carry health insurance or pay a penalty. It also would have limited government subsidies for lawmakers' own health-care premiums and those of their staffs. The Senate rejected it shortly afterward, 54-46.

After 1 a.m., with the shutdown of agencies already triggered, the House voted again to support the same proposal, returning it to the Senate with a measure that would set up a negotiating committee. The vote was 228-199.

To limit the impact of the shutdown on the Pentagon, Congress passed and Mr. Obama signed legislation just before midnight that would ensure that all members of the military be continued to be paid for the duration of the shutdown, even as hundreds of thousands of other government workers will be furloughed without pay.

Republican lawmakers on Monday had been faced with a choice. With the Senate rejecting changes to the health law, they could have pushed once again for the Senate to change its mind, or deferred their fight against the health law to another day and passed a funding measure shorn of health-law provisions.

After a 90-minute meeting of the House GOP on Monday afternoon, Republicans decided to press again with another attempt to curb the health law.

While Republicans rallied behind their hang-tough strategy, through the day there were clear signs of growing anxiety about political fallout to the party from a shutdown.

"It is moronic to shut down the government over this," said Rep. Devin Nunes (R., Calif.).

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AFP/Getty Images

House Speaker John Boehner, center, walks to a House Republican meeting Monday.

Even before the new move was advanced, some Republicans were urging GOP leaders to drop the fight over the spending bill.

"We have tried robustly on the spending bill, and it hasn't borne fruit," said Rep. Doug Lamborn (R., Colo.). He said the GOP could use other tactics to fight the health law, but "for this week, we may have to give up."

Others said they were eager to press the fight against the health law. "Obamacare is slowing the economy down even more than a government shutdown would," said Rep. Marlin Stutzman (R., Ind.), before a closed-door GOP meeting on Monday. "It's creating chaos for the American people."

The tea party and other conservatives have for months pressured congressional Republicans to try to undercut the law before Tuesday, when a crucial milestone will be passed—the launch of a new system of health-insurance marketplaces for individuals to buy policies.

Sen. Ted Cruz   (R., Texas) led the unsuccessful fight in the Senate to pass the House's initial legislation to eliminate money for the health law while funding the rest of the government.

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