US Government shutdown: What does it mean? And what are the papers saying?

A partial shutdown of the US government has begun after the two houses of Congress failed to agree a budget last night, with the Republican-led House of Representatives adamant they would only agree to a deal if it included a delay to the start of Obamacare, the President’s package of health reforms.

What does a shutdown entail?

The shutdown means that 800,000 federal employees will not be reporting for work today, as government departments no longer have free funds to pay them. There is no guarantee that these employees will receive back pay when they can return to work. Pervious shutdowns, in 1995 and 1996, lasted five and 21 days.

Not all government programs will halt. Some don’t require public funds to be set aside annually. Social security, Medicare and similar entitlements will continue. Other government functions “necessary to protect life” will also carry on, including law enforcement, intelligence and foreign embassies. Finally, some arms of the state have alternative funding streams to continue short-term, such as the Courts, which collect fines and fees.

What will shutdown?

Federal museums, national parks, offices that give visas to foreigners, federal regulatory agencies.

What are the papers saying?

Dan Balz in The Washington Post: ‘At this point, however, House Republicans are being driven more by some of their outside groups, which continue to exhort them to resist any call for compromise, than to many of the party’s leaders who recognize the responsibilities of governing. Those tensions in the GOP will not subside no matter what happens in this moment.’

In the LA Times Don Lee writes:

‘Estimates of economic effect vary.

However, most analysts predict that a two-week partial government shutdown would shave 0.3 to 0.4 of a percentage point from economic growth in the fourth quarter. Much of this would be due to lost pay for hundreds of thousands of furloughed federal workers.

Although not devastating, that's not a small amount either, especially for an economy that has been growing this year at an anemic annual rate of less than 2%.’

For the New York Times Joe Nocera adds:

“A party controlled by its most extreme faction will ultimately be forced back to the center. The Democrats learned that when Walter Mondale was losing to Ronald Reagan, and Michael Dukakis to George H.W. Bush.

Now it is the Republicans who don’t seem to understand that their extreme tactics are pleasing a small percentage of their countrymen but alienating everyone else.”