MercoPress. South Atlantic News Agency

Irreconcilable positions forecast US government shutdown could turn really serious

Democrats claim the US was being taken hostage by the Republicans’ Tea Party faction

The partial shutdown of the US government showed no signs of ending quickly, as lawmakers stiffened their positions and sought to shift blame to the other side.

Day one of the first shutdown since 1996 wrapped up with no talks scheduled between the White House and Congress, making it more likely the standoff would merge with the fight over raising the US debt limit later this month to make sure the government can pay all its bills.

Market reaction was muted on Monday, as up to 800,000 federal workers were sent home with no pay-checks and parks and other services were shuttered across the country. US stocks rose, after the Standard & Poor’s 500 had fallen Sept. 30 to a three-week low, as investors speculated that the economic effects of the partial government shutdown would be limited.

House Republicans sought a way out of the impasse, flinging proposals at the Democrats and seeking to engage the Senate and President Barack Obama in direct talks.

“The president isn’t telling the whole story when it comes to the government shutdown,” House Speaker John Boehner, an Ohio Republican, wrote in USA Today. “The fact is that Washington Democrats have slammed the door on reopening the government by refusing to engage in bipartisan talks.”

Senate Democrats kept sending back the plans, rejecting the ideas as political theatre and insisting that Republicans fund the whole government temporarily and stop demanding major changes in Obama’s Affordable Care Act. Obama had harsh words for the Republicans, saying they had “demanded ransom just for doing their job” of passing a budget.

The shutdown coincided with the first day of enrolment for the health-care law, as new exchanges tried to handle of flood of consumer interest.

On the House floor, Republicans offered three bills yesterday that would reopen parks and the Department of Veterans Affairs and allow Washington’s city government to spend its money. The move was designed to blunt some of the most visible effects of the shutdown and force Democrats to choose between popular programs and their insistence on a full resumption of government funding.

After all three failed under an expedited procedure that required bipartisan support, Republicans said they would keep pressing similar efforts that Obama and the Democratic-controlled Senate have consistently rejected.

Both sides jockeyed on Monday for the political high ground in the standoff. Democrats said the nation was being taken hostage by the Republicans’ Tea Party faction, while the Republicans faulted Senate Democrats and Obama for being unwilling to negotiate over any proposal to delay or curtail the health-care act.

Unlike past fiscal feuds, this dispute is more about the health law than the overall amount of government spending. Democrats say they have already made a concession by accepting spending levels set under the across-the-board cuts known as sequestration, which first went into effect earlier this year and were part of the deal to avoid a 2011 default.

The US budget deficit in June was 4.3% of GDP, down from 10.1% in February 2010 and the narrowest since November 2008, when Obama was elected to his first term, according to data compiled from the Treasury Department and the Bureau of economic analysis.

House Republicans are divided between the hard-liners insisting on confrontation over the health-care law and at least 10 others who say they would support the Senate Democrats’ spending bill, which would end the shutdown without conditions attached.

Democrats are counting on the split to force Boehner to allow a vote on that short-term spending bill, which probably would pass with the support of most Democrats and some Republicans.

The start of enrolment in the health-insurance exchanges mandated under Obama’s health-care law wasn’t stymied by the shutdown because it is financed by mandatory funding unaffected by the budget impasse.

“This shutdown is about rolling back our efforts to provide health insurance to folks who don’t have it,” Obama said at the White House yesterday. “I know it’s strange that one party would make keeping people uninsured the centrepiece of their agenda, but that apparently is what it is.”