iconimg Friday, September 04, 2015

Tania Goklany, Hindustantimes.com
New Delhi, October 01, 2013
The United States lurched into a dreaded government shutdown early on Tuesday for the first time in 17 years, triggering agency closures and hundreds of thousands of furloughs as Congress missed a deadline to pass a budget.

What is the shutdown about?
The Republican party controls the lower house, or House of Representatives, while the Democrats control the Senate.

Under US law, a new bill is required to approve the next financial year's funding. This has to be approved by the House of Representatives, and the Senate, and the President.

The crisis is rooted in an attempt by Republicans to make the passage for government's next year's budget, conditional on delaying Obama's signature healthcare reform.

The House approved a legislation that would delay the act by a year. The Senate has refused to meet to discuss it. It's deadlock.

What the shutdown implies

Paychecks of more than 8,00,000 federal workers get jeopardised.

Workers at non-essential services, from Pentagon employees to rangers in national parks, would be told to take an unpaid holiday (full breakdown here).

Essential services, such as social security and Medicare payments, would continue.

The US army would keep operating, even if pay packets are suspended. However, Obama has claimed that he's signed a law ensuring troops get paid on time.

The US postal services will also remain unaffected by the shutdown.

Details of what's open, what's closed

How could the shutdown deadline be broken?

Congress could pass a new "clean" funding plan, which didn't include a delay to the Affordable Healthcare Act. Or the Senate and the White House could accept such a delay. Or a compromise between the two positions could be finessed.

Is it unprecedented?

No. The US government has shut down 17 times since 1977. However, it has not happened for 17 years.

How will it affect India?

Getting visa for US may be difficult. This will affect Indian IT companies.

The shutdown will weigh heavily on the rupee.

(With agency inputs)