US government may shut down in days following budget row
The US faces a government shutdown this week as Democrats and Republicans clash over proposals for $33bn (£20bn) in budget cuts. A weekend of compromise talks appears to have failed.Barack Obama
called the Republican House speaker John Boehner and others urging them
to find a resolution, the White House said. The president warned that a
shutdown would be harmful "to our economic recovery."
Boehner has said he is against a shutdown but faces pressure from rightwing Tea Party Republicans who are pushing for $61bn in cuts that were agreed in the House last month but rejected by Obama. Tea Party supporters gathered in Washington last week and chanted "cut it or shut it" as Republican Mike Pence told the crowd: "Let's go pick a fight." He said a shutdown could be necessary to protect everyone's "children and grandchildren." Other Republicans, including Paul Broun, said Obama had orchestrated a plan to shut down the government to make the Republicans look bad.
This week politicians will attempt to broker their seventh stopgap measure in this fiscal year and reach a deal on federal spending for the next six months in order to avert the first government shutdown since 1995. Republicans will unveil their budget plan on Tuesday.
The current funding resolution expires at midnight on 8 April and a shutdown could start the day after. If politicians fail to reach a compromise, Congress could stay in session next weekend, trying to finalise a spending plan and to decide what services would be deemd vital in order to avoid a large-scale disruption.
The extent of the problems that would be caused by a shutdown is unclear. Federal agencies are currently drafting contingency plans to determine who would keep working but have been told not to disclose details. While US military operations would be unaffected and essential services such as air traffic control would also be maintained, the processing of visas and other administrative work are likely to be hit, and national parks would be closed.
The picture is complicated by that fact that so many government jobs are now contracted to private enterprises. This outsourcing means some parts of the government could carry on running during the shutdown.
Uncertainty over pay and contracts, however, is likely to cause extensive disruption. Spending on government contracts totalled $535bn in the 2010 financial year. If the government cuts off cash to its contractors, the pay of workers may be affected, especially at smaller firms who can not afford to ride out a closure. Union bosses have warned workers not to assume they will be paid for work done during a shutdown. Other workers may find they are locked out of their offices.
Government shutdowns are a rare. The most recent stretched from mid-December 1995 to early January 1996 and was the longest in recent history.
Republican senator Lindsey Graham played down the possibility of a shutdown on Sunday and said a deal could be made with fiscally conservative Democrats. "There are enough red-state Democrats" to get a deal worked out, Graham said on CBS's Face the Nation. Last month 85 Democrats joined Republicans to pass the last short-term budget bill to keep the government running through until 8 April.
On Friday, Obama warned lawmakers that it would be the "height of irresponsibility" to shut down the government. "We know that a compromise is within reach. And we also know that if these budget negotiations break down, it could shut down the government and jeopardise our economic recovery," he said.
His speech came as government figures showed the US unemployment rate is continuing to drop, falling to 8.8%, the lowest level since March 2009. The unemployment rate has dropped 1% in the last four months, the largest four-month drop since 1984. The US stock markets have enjoyed their best first quarter in a dozen years.
Boehner said last week that a shutdown would undermine Republican goals to cut government spending. "Let's all be honest, if you shut the government down, it'll end up costing more than you save because you interrupt contracts. There are a lot of problems with the idea of shutting the government. It is not the goal. The goal is to cut spending," Boehner told a news conference.
Boehner has said he is against a shutdown but faces pressure from rightwing Tea Party Republicans who are pushing for $61bn in cuts that were agreed in the House last month but rejected by Obama. Tea Party supporters gathered in Washington last week and chanted "cut it or shut it" as Republican Mike Pence told the crowd: "Let's go pick a fight." He said a shutdown could be necessary to protect everyone's "children and grandchildren." Other Republicans, including Paul Broun, said Obama had orchestrated a plan to shut down the government to make the Republicans look bad.
This week politicians will attempt to broker their seventh stopgap measure in this fiscal year and reach a deal on federal spending for the next six months in order to avert the first government shutdown since 1995. Republicans will unveil their budget plan on Tuesday.
The current funding resolution expires at midnight on 8 April and a shutdown could start the day after. If politicians fail to reach a compromise, Congress could stay in session next weekend, trying to finalise a spending plan and to decide what services would be deemd vital in order to avoid a large-scale disruption.
The extent of the problems that would be caused by a shutdown is unclear. Federal agencies are currently drafting contingency plans to determine who would keep working but have been told not to disclose details. While US military operations would be unaffected and essential services such as air traffic control would also be maintained, the processing of visas and other administrative work are likely to be hit, and national parks would be closed.
The picture is complicated by that fact that so many government jobs are now contracted to private enterprises. This outsourcing means some parts of the government could carry on running during the shutdown.
Uncertainty over pay and contracts, however, is likely to cause extensive disruption. Spending on government contracts totalled $535bn in the 2010 financial year. If the government cuts off cash to its contractors, the pay of workers may be affected, especially at smaller firms who can not afford to ride out a closure. Union bosses have warned workers not to assume they will be paid for work done during a shutdown. Other workers may find they are locked out of their offices.
Government shutdowns are a rare. The most recent stretched from mid-December 1995 to early January 1996 and was the longest in recent history.
Republican senator Lindsey Graham played down the possibility of a shutdown on Sunday and said a deal could be made with fiscally conservative Democrats. "There are enough red-state Democrats" to get a deal worked out, Graham said on CBS's Face the Nation. Last month 85 Democrats joined Republicans to pass the last short-term budget bill to keep the government running through until 8 April.
On Friday, Obama warned lawmakers that it would be the "height of irresponsibility" to shut down the government. "We know that a compromise is within reach. And we also know that if these budget negotiations break down, it could shut down the government and jeopardise our economic recovery," he said.
His speech came as government figures showed the US unemployment rate is continuing to drop, falling to 8.8%, the lowest level since March 2009. The unemployment rate has dropped 1% in the last four months, the largest four-month drop since 1984. The US stock markets have enjoyed their best first quarter in a dozen years.
Boehner said last week that a shutdown would undermine Republican goals to cut government spending. "Let's all be honest, if you shut the government down, it'll end up costing more than you save because you interrupt contracts. There are a lot of problems with the idea of shutting the government. It is not the goal. The goal is to cut spending," Boehner told a news conference.
