THE US government was due to run out of money at midnight last night barring a last-minute breakthrough in budget negotiations between congressional leaders and the White House.
Some 800,000 federal employees who are deemed “non-essential” began receiving furlough notices late Thursday.
By yesterday morning, Republicans and Democrats could not even agree what the dispute was about: abortion or spending cuts.
Referring to the Republicans’ determination to cut $300 million (€207 million) in funding for Planned Parenthood, the Senate Democratic majority leader Harry Reid said: “It’s an ideological battle. It has nothing to do with fiscal integrity in this country.”
The Republicans disputed Mr Reid’s version of events. “The largest issue is still spending cuts,” said Michael Steel, spokesman for House Speaker John Boehner.
“The American people want to cut spending to help the private sector create jobs – and the Democrats that run Washington don’t.”
Mr Reid said the two sides had agreed to cut about $38 billion for the rest of the fiscal year, which will end on September 30th. The right-wing Tea Party wants $100 billion in cuts. A Bill passed by the House but rejected by the Senate in January would cut $61 billion. Mr Boehner is reportedly holding out for a compromise at $39 billion.
If the shutdown takes place, economists estimate it will cost the government $6 billion per week.
President Barack Obama met with Mr Reid and Mr Boehner twice on Thursday. “I’m not yet prepared to express wild optimism,” he said after talks on Thursday night. “But I think we are further along today than we were yesterday.”
Mr Obama asked the congressional leaders for an answer by noon yesterday, “because the machinery of the shutdown is necessarily starting to move”. That deadline was missed. Mr Obama cancelled a scheduled trip to Indiana to promote clean energy.
The president said a shutdown risked provoking a renewed recession. “We’ve been working very hard over the last two years to get this economy back on its feet,” he said. “We’ve now seen 13 months of job growth, 1.8 million new jobs . . . For us to go backwards because Washington couldn’t get its act together is unacceptable.”
Leaders from both parties have sought to portray the other side as responsible for the looming shutdown.
On Thursday, the House voted 247 to 181 for a stopgap, one-week continuing resolution that would cut $12 billion in programmes, keep the government running one more week and fund the military until September 30th.
Congress has passed seven continuing resolutions since last autumn. Republicans reproach Democrats for failing to enact a 2011 budget when they held majorities in both Houses.
In a rare note of optimism, Steny Howyer, the second-ranking Democrat in the House, told NBC television yesterday morning: “I think we’re very close. I think we’ve come 70 per cent of the way in terms of dollars. That’s a long way to go in trying to reach compromise.”
A shutdown would close national parks and museums. Income tax refunds and passport applications would go unprocessed. But the military, police, air traffic control and postal delivery would continue to function.