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 to date, Obama said the shutdown is 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 that caused the shutdown continued Tuesday with a Senate majority voting for a fourth time to reject a spending plan by the Republican-led House that sought to undermine Obamacare.
This time, the House proposal included a call for a committee to seek a compromise on the two chambers’ legislative plans. But the Democratic-led Senate turned it down, with Senate Majority Leader Harry Reid saying 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 votes to fund specific government departments and programs, starting with spending for veterans, the District of Columbia and the Park Service.
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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.
Reid called this effort “just another whacky idea from tea party Republicans,” while White House spokeswoman Amy Brundage vowed the president would veto any such bills.
“These piecemeal efforts are not serious and they are no way to run a government,” Brundage said. “The president and the Senate have been clear that they won’t accept this kind of game playing.”
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 Speaker John 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 said the constant political crises over government funding — not the health care law upheld last year by the Supreme Court — have hurt the U.S. economy, calling Republicans “reckless” for persisting in their “ideological crusade.”
And speaking specifically of partisan politics affecting the nation’s responsibility to cover its debts, the president noted 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,” Obama 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.”
First shutdown in nearly 18 years
The latest shutdown — taking effect with the start of the fiscal year Tuesday — is not the first for the U.S. government. The last time it happened, 18 years ago during the Clinton administration, the stalemate lasted 21 days.
Now, the Republican-controlled House and the Democratic-controlled Senate have both refused to budge from their visions for the budget and, beyond that, health care reform.
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. The House GOP plan also called for a conference committee — which usually result from competing legislation from the two chambers on major issues, rather than a short-term continuing resolution intended to keep the government running for a few 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 parties 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. For instance, this week Republican Rep. Todd Rokita of Indiana called it “the most insidious law known to man.”
Both Democrats and Republicans say that a clean spending measure — with no Obamacare amendments, as urged by the president and his allies — would pass the House with support from the Democratic minority and moderate Republicans.
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. And 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.”
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.
Speaking in the early minutes of the shutdown, the Ohio Republican insisted the House voted “to keep the government open” and assure “fairness for all Americans under Obamacare” — then walked away from the podium.
White House spokesman Jay Carney told CNN 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.
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 effect 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, congressional paychecks 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.
Members of the military will also get paid — thanks to Congress, which unanimously managed to come together to pass a bill that Obama signed.
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.”
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A game of chicken between Dems, GOP
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%.