US Shutdown: Senate Rejects Budget Changes

Written By Unknown on Selasa, 01 Oktober 2013 | 12.14

The Senate has rejected conditions imposed on the federal budget by the House of Representatives, paving the way for a partial shutdown of government services.

Senators in the Democrat-dominated upper house refused to support a bill by their colleagues in Congress which delayed the introduction of the controversial Obamacare.

The rejection of the bill means there is no agreement on how federal money should be spent in the coming budgetary year.

If the Democrats and Republicans fail to find a solution before the deadline at midnight on Monday, the shutdown goes into force at 12.01am EST on Tuesday (5.01am BST).

President Obama addressed the nation on Monday afternoon (US time), frankly setting out what a shutdown would mean for the people of the United States.

"Vital services that seniors and veterans, women and children, businesses and our economy depend on will be hamstrung.

"Tourists will find every one of our national parks and monuments ... immediately closed and of course the communities and small businesses that rely on these national treasures for their livelihoods will be out of customers and out of luck.

US Senator Ted Cruz Senator Ted Cruz has been among the most ardent critics of Obamacare

"These Americans are our neighbours, their kids go to our schools, they worship where we do ... they are the customers of every business in this country. A shutdown will have a very real economic impact, right away.

"The idea of putting progress at risk, is the height of irresponsibility. One faction, of one party, in one House of Congress, in one branch of government, does not get to shutdown government just to refight the results of an election.

"My hope and expectation, is in the 11th hour once again, Congress will choose to do the right thing, once again."

His comments came after the Senate's 54-46 vote refusing to accept the House of Representative's spending plans.

Although there have often been spats over the amount federal government should be spending or gathering in tax, the federal funding bill is usually considered routine business.

This time, however, the spending plans are tied to the highly controversial health care law promoted by President Obama.

Assuming no compromise is reached before midnight EST, it will be the first shutdown in 17 years.

Shutdown Looms The last shutdown was under President Bill Clinton in 1995

While essential services such as mail delivery would remain in place, up to about 800,000 government employees could be forced off work, possibly without pay.

National parks, some museums and such tourist attractions as the Statue of Liberty would be closed. While Social Security and Medicare benefits would keep coming, there could be some delays in certain cases.

The healthcare law was previously passed by Congress and signed into law by President Barack Obama in 2010, despite opposition by the Republican Party, especially Tea Party conservatives.

Although Obamacare has become a legal entity, it still has to be funded.

Funding for the scheme was due to be in this year's federal budget, which was due to start on October 1.

A number of the most hardline Republicans in the House of Representatives have sought to frustrate the introduction of Obamacare by finding a way to stop it being funded.

Their latest move was to introduce conditions to the federal funding bill that would have delayed the start of the health care scheme and altered Obama's plans to tax medical devices.

The Senate rejection of the House's bill, leaves federal funding in a stalemate. Both the House of Representatives and the Senate have to agree before a budget can be approved.

The fear that a shutdown could occur had an immediate effect on Wall Street, which was down 150 points, or 1%, at the start of the day.

With a solution looking increasingly elusive, both sides have been blaming the other.

Markets in other countries also fell in response to the fears. In Japan the Nikkei closed 2% lower while the FTSE 100 was almost 1% lower on the day.

The last time the federal government shutdown was under President Bill Clinton, when services ground to a halt for 28 days between December 1995 and January 1996.

It nearly happened again in April 2011.


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