WASHINGTON (CNN) — Republicans forced an unnecessary budget crisis in their single-minded effort to dismantle health care reforms, President Barack Obama said Tuesday as frustration spread across Washington and the country on the first day of a government shutdown.
In some of his strongest criticism so far, Obama said the shutdown intended to hinder government efforts to provide health insurance to 15% of the U.S. population that doesn’t have coverage, adding it was “strange that one party would make keeping people uninsured the centerpiece of their agenda.”
The stalemate in Congress that caused the shutdown continued with Senate Democrats voting for a fourth time to reject a spending plan by House Republicans that sought to undermine Obamacare.
This time, the House proposal also included a call for a conference committee to seek a compromise. But Senate Majority Leader Harry Reid said Democrats turned down the package because it amounted to extortion by Republicans to force concessions on Obama’s signature health care reforms.
Reid said the Senate wants to negotiate a budget with the House, “but not with the government closed.”
“We’re not going to relitigate the health care issue,” Reid said, calling for the House to approve a “clean” spending plan to fund the government for a few months before separate negotiations on possible changes to the 2010 Affordable Care Act. “It’s time for Republicans to stop obsessing over old battles.”
New House GOP strategy
However, sources in the House Republican leadership told CNN on Tuesday they plan a series of separate votes to fund specific government departments or agencies, starting with spending for veterans, the District of Columbia and the Park Service.
Some conservatives led by GOP Sen. Ted Cruz of Texas have called for such a strategy, which would force opponents to vote against authorizing spending for popular programs like veterans affairs.
Under the scenario described by Cruz, the piecemeal spending plan would be a way to defund Obamacare on a step-by-step basis.
White House spokesman Jay Carney said the new GOP strategy was “not a serious approach,” while Reid called it “just another whacky idea from tea party Republicans” that would defund Obamacare.
The impasse over government funding raised the specter of a similar stalemate later this month when the federal debt ceiling must be raised so the nation can pay its bills.
House SpeakerJohn Boehner signaled another major fight by Republicans around the October 17 deadline to increase how much the government can borrow, writiing in USA Today that “there is no way Congress can or should pass such a bill without spending cuts and reforms to deal with the debt and deficit.”
Obama has warned against tying partisan politics to the congressional responsibility to cover the nation’s debts, noting that brinksmanship in 2011 led to the first-ever downgrade of the U.S. credit rating.
“I will not negotiate over Congress’ responsibility to pay bills it’s already racked up,” he said Tuesday. “I’m not going to allow anybody to drag the good name of the United States of America through the mud just to refight a settled election or extract ideological demands. Nobody gets to hurt our economy and millions of hard-working families over a law you don’t like.”
A game of political chicken that ended in failure in the first minutes of Tuesday, with neither side blinking, brought the outcome nobody said they wanted — a shutdown that will stop 800,000 Americans from getting paid and could cost the economy about $1 billion a week.
First shutdown in nearly 18 years
It is the first time the government has shut down in nearly 18 years. The last time it happened, during the Clinton administration, the stalemate lasted 21 days.
Now, the Republican-controlled House and the Democratic-controlled Senate will try to see if they can reconcile their two versions of the spending plan at the center of the debate. So far, each has refused to budge on how to fund the government in the new fiscal year, which started Tuesday.
At the White House, Obama blamed Republicans for the shutdown, using words such as “reckless” in describing what he called an “ideological crusade.”
Taking aim at GOP claims of being better fiscal stewards, Obama said the economic growth demanded by Republicans was hindered by constant political crises over government funding like the current shutdown, not the health care law upheld by the Supreme Court last year.
The GOP counteroffer rejected by the Senate on Tuesday would have delayed Obamacare for a year and ended federally provided health care for the president, members of Congress and their staff while funding the government for 11 weeks.
In addition, the House GOP plan proposed a conference committee with the Senate to work out a compromise. Such a committee is usually the result of competing legislation from the two chambers on major issues, rather than a short-term continuing resolution intended to keep the government running for a matter of weeks.
Democratic Sen. Dick Durbin of Illinois, a leading liberal voice, told CNN that he is open to negotiations with the House on at least one specific provision of Obamacare — a tax on medical devices that some in both party oppose.
However, Durbin echoed the position of Reid that such negotiations must be separated from the spending impasse that has shut down the government.
“The conversation should continue, but let’s not do it with our government shutdown,” he said, adding that Congress would have to replace the $30 billion in lost revenue over 10 years that would occur if it eliminated the medical device tax.
On the Republican side, Rep. Darrell Issa of California said he could vote to fund the government for a few days or weeks to provide time for a conference committee to work out a compromise.
“I personally would vote for 10 days, even 30 days if that was necessary so that we could resolve these differences,” Issa told CNN.
‘A dangerous message’
At the heart of the issue is the insistence by House Republicans that any spending plan for the new fiscal year include anti-Obamacare amendments. Senate Democrats are just as insistent that it doesn’t.
Obamacare isn’t directly tied to funding the government. But it’s so unpopular among the Republican tea party conservatives that they want it undercut, if not outright repealed.
The health care law “is the most insidious law known to man,” Republican Rep. Todd Rokita of Indiana said this week.
Carney told CNN that such intransigence is the root of the shutdown, noting that conservative Republicans such as Rokita are the only ones pushing a political agenda for meeting the congressional responsibility of passing a budget.
Amid the finger-wagging and fulminating, major components of the new health insurance law went into effect on schedule on Tuesday.
“The Affordable Care Act is moving forward. You can’t shut it down,” said a post on Barack Obama’s verified Twitter feed.
Tuesday was the start of both the new fiscal year and implementation of the Obamacare private exchanges, a major component of the health care reforms tied to the individual mandate for people to obtain health coverage that conservatives despise.
While House Republicans repeatedly tacked anti-Obamacare provisions to their version of the spending plan, Democrats stripped them and insisted the House instead pass a “clean” measure with no Obamacare amendments.
Both Democrats and Republicans say such a clean spending measure would pass the House witih support from the Democratic minority and moderate Republicans.
However, Boehner has succumbed to pressure from the tea party right to avoid a vote that would pass something without causing some harm to the health care reforms.
Boehner, speaking in the early minutes of the shutdown, said he hoped Senate Democrats would agree to negotiate.
He was asked if he had a message for those facing furloughs or if he had a plan to restore back pay.
“The House has voted to keep the government open, but we also want basic fairness for all Americans under Obamacare,” Boehner said before walking away from the podium.
A blow to the economy
The shutdown of the government — the country’s largest employer — isn’t happening all at once.
Federal employees who are considered essential will continue working. Those deemed non-essential — up to 800,000 — could be furloughed, unsure when they’ll be able to work or get paid again.
The shutdown could cost the still-struggling U.S. economy about $1 billion a week in pay lost by furloughed federal workers. And that’s only the tip of the iceberg.
While many agencies have reserve funds and contingency plans that would give them some short-term leeway, the economic loss would snowball as the shutdown continued.
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 economy about $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.
Troops will still get paid
Congress actually managed to come together to pass one bill — unanimously, at that.
The Senate approved a House-approved measure Monday to ensure members of the military would continue to get paid during the shutdown. Obama signed it.
But it’s uncertain how the shutdown will affect veterans, including the 3.3 million who are disabled. If the shutdown stretches into late October, the Veterans Affairs Department could have to halt disability and pension checks for elderly and ill veterans.
“That’s what they need to pay rent, to pay food,” said Tom Tarantino of the Iraq and Afghanistan Veterans of America. “It’s not their total income, but it is a significant part of it.”
Congressional paychecks also safe
Although much of the federal workforce will go without pay, checks will keep coming to the 533 current members of Congress. The president too will get paid. His salary — $400,000 — is considered mandatory spending.
Some members of Congress and government officials have said they will donate their salary to charity during a shutdown.
Obamacare still focus
Democrats have pressured Boehner to give up a losing fight over Obamacare forced by tea party conservatives.
Some Republicans also have expressed frustration with the tactics of their congressional colleagues. Veteran GOP Sen. John McCain of Arizona noted that any attempt to repeal Obamacare was going to fail because of Obama’s veto, which would require a two-thirds majority in the Senate to overcome.
GOP Rep. Peter King of New York said the problem is tea party conservatives driving the Republican agenda in the House.
“We have people in the conference, I believe, who’d be just as happy to have the government shut down,” King said. “They live in these narrow echo chambers. They listen to themselves and their tea party friends. That keeps them going, forgetting that the rest of the country thinks we’re crazy.”
According to a CNN/ORC poll, 68% of Americans think shutting down the government for even a few days is a bad idea, while 27% think it’s a good idea.
And it appears most Americans would blame congressional Republicans for a shutdown: Sixty-nine percent said they agreed with the statement that the party’s elected officials were acting like “spoiled children.”
Democrats, however, weren’t far behind: Fifty-eight percent of respondents said they, too, were acting like spoiled kids.
Another poll showed public support for Congress at record low levels — at 10%.