Some 800,000 federal workers across the United States are now caught in the middle of political fire exchange between Democrats and Republicans as first day of the government shutdown kicked in.
Both parties are in loggerheads over the nation's latest fiscal crisis, with Republican-led House throwing its latest proposal Tuesday night but failed in separate votes to approve piecemeal funding for three specific programs -- the District of Columbia, veterans affairs and national parks.
In US politics, a government shutdown takes place when Congress fails to pass authorization for sufficient funds for government operations, therefore, the government stops providing all but "essential" services at first, but since Congress must authorize all expenditures, there is no law protecting any government service from stoppage. Federal services that may continue for a time after a shutdown include the National Weather Service and its parent agencies, medical services at federal facilities, armed forces and air traffic management.
According to economic reports and media outlets here, this shutdown of the government -- the country's largest employer -- isn't happening all at once, with federal employees who are considered essential will continue working. Those deemed non-essential -- up to 800,000 -- could be laid off, unsure when they'll be able to work or get paid again.
The shutdown could cost the still-struggling US economy about USD one billion a week in pay lost by laid off federal workers.
The total economic impact is likely to be at least 10 times greater than the simple calculation of lost wages of federal workers, said Brian Kessler, economist with Moody's Analytics. His firm estimates that a three-to four-week shutdown would cost the US economy about USD 55 billion.
Initial market reaction around the world indicated little serious concern for now. In New York, all the major indexes were higher on Tuesday after closing lower the day before. World markets also rose, while the dollar slipped against other major currencies.
Last Tuesday, President Barack Obama criticized the Republicans for being "reckless" in their willingness to take down the government in order to take down the law overhauling major aspects of health care coverage. He championed the law, signed it in 2010, and then saw it upheld by the Supreme Court last year.
Although much of the federal workforce will go without pay, Some 533 current members of Congress plus President Obama himself will get paid. His salary -- USD 400,000 -- is considered mandatory spending.
Military personnel will also be paid -- thanks to Congress, which unanimously managed to come together to pass a bill that Obama signed.
During the Ford and Carter administrations, there were six partial government shutdowns that affected only the departments of Labor and Health, Education, and Welfare and lasted from eight to 18 days and the primary issue of dispute was federal funding for abortion.
During the Reagan administration, there were eight full government shutdowns that lasted only one to three days apiece, primarily over the issue of the United States budget deficit. There was a similar four-day shutdown during the first Bush administration.
During the Clinton administration, there were two full government shutdowns lasting five and 21 days apiece, the second of which was the longest of its kind to that date. The primary issue was again the country's budget deficit.
The ongoing shutdown, having begun on October 1st, 2013 stemmed primarily out of a dispute between the Republican-controlled House of Representatives and the Democrat-controlled Senate (the latter supported by President Obama) over the Affordable Care Act, signed into law in 2010.