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US govt in shutdown mode, senate to meet on bill

With Congress unable to agree on legislation to fund federal govt due to stalemate over healthcare law, non-essential govt services may halt from Tuesday. Yashwant Raj reports.

world Updated: Oct 01, 2013 03:18 IST
Yashwant Raj

Washington: If US Congress fails to pass a budget bill by midnight, the federal government will shut down for the first time in 17 years, with varied repercussions for the world economy.

In the short term, markets will be impacted adversely, including in India. But if the shut down continued for weeks, as some fear it might, the consequences could be worse.

The Senate, which meets in a few hours, will most likely reject a bill passed on Saturday by the House of Representatives, forcing it to send another, with time running out. “The Senate decided not to work yesterday,” Boehner said in a rare public taunt from the House floor. “Well my goodness, if there’s such an emergency, where are they?”

Congress must pass a bill before midnight to fund the federal government. If it doesn’t the government will shut down, leaving only the essential staff at work. The last shutdown was in 1995-1996, on the watch of Democrat President Bill Clinton and Republican Congress led by Speaker Newt Gingrich. It lasted 28 days.

The issues at stake then were funding of federal health programme plan Medicaid, education and public health. Now, it’s President Barack Obama’s signature healthcare law.

Republican-dominated House tagged a provision to the Budget Bill defunding the healthcare law, presenting a clear choice: You want us to pass the budget, kill the healthcare law. The House passed the Bill, but the senate voted against it. The House returned another version, allowing two months of federal funding for delaying the healthcare law by a year.

The Senate is set to reject this too, and send back a clean bill stripped off provisions cutting funding for the new healthcare reforms law, which kicks in from October 1. Polls show most Americans blame Republics for the budget crisis, which has encouraged Democrats to try and force the House into a situation where it caves in.