Warring sides in shutdown showdown

Harry ReidRepublicans and Democrats are trading blame for the impasse on a temporary bill to keep agencies open as the US government teeters on the brink of a partial shutdown.

Congress was closed yesterday after a post-midnight vote in the Republican-run House of Representatives to delay by a year key parts of President Barack Obama's health care law and repeal a tax on medical devices, in exchange for avoiding a shutdown.
The Senate is due to convene today, just hours before the midnight US time shutdown deadline, and its majority leader Harry Reid has already promised that Democrats will kill the House's latest proposal.

In the event politicians blow the deadline, about 800,000 government workers would be forced off the job without pay.

Some critical services such as patrolling the borders, inspecting meat and controlling air traffic would continue. Social security benefits would be sent and the Medicare and Medicaid health care programmes for the elderly and poor would continue to pay doctors and hospitals.

The latest fiscal fight underscored the deep divide between the Republicans and the Obama administration and its Democratic allies.

Republicans insisted the health care law was costing jobs and driving up health care costs. Mr Obama has said he will not let the law, his chief domestic achievement, be gutted.

Democrats say Republicans are obsessed with attacking the overhaul - which is aimed at providing health coverage for millions of uninsured Americans - and the president.

Since the last government shutdown 17 years ago, temporary funding bills known as continuing resolutions have been non-controversial, with neither party willing to chance a closure to achieve legislative goals it could not otherwise win.

But with exchanges set to open tomorrow where people could shop for health care coverage from private insurers, politicians from the Republicans' ultra-conservative tea-party wing are willing to take the risk in their drive to kill the health care law, known as Obamacare.

The action in Washington was limited mainly to Sunday TV talk shows and barrages of press releases as Democrats and Republicans rehearsed arguments for blaming each other if the government closes its doors at midnight.

"You're going to shut down the government if you can't prevent millions of Americans from getting affordable care," said Democratic Rep Chris Van Hollen of Maryland.

"The House has twice now voted to keep the government open. And if we have a shutdown, it will only be because when the Senate comes back, Harry Reid says, 'I refuse even to talk'," said Republican senator Ted Cruz of Texas.

Mr Cruz staged a 21-hour marathon speech against allowing the temporary funding bill to advance if stripped clean of a tea party-backed provision to derail Obamacare. The effort ultimately failed.

The battle started with a House vote to pass the short-term bill with a provision that would have de-funded implementation of the health care overhaul. The Senate voted along party lines to strip that out and lobbed the measure back to the House.

The latest House measure, passed early yesterday by a near party-line vote of 231-192, sent back to the Senate two major changes - a one year delay of key provisions of the health insurance law and repeal of a new tax on medical devices that partially funds it - steps that still go too far for The White House and its Democratic allies on Capitol Hill.

Senate rules often make it difficult to act quickly, but the chamber can act on the House's latest proposals by simply calling them up and killing them on a non-debatable motion.

Eyes were already turning to the House for its next move. One of its top leaders vowed it would not simply give in to Democrats' demands to pass the Senate's "clean" funding bill.

"The House will get back together in enough time, send another provision not to shut the government down, but to fund it, and it will have a few other options in there for the Senate to look at again," said number three House Republican leader Kevin McCarthy of California. "We are not shutting the government down."

But both sides' bravado may fade as the deadline to avert a shutdown nears.

Asked whether he could vote for a "clean" temporary funding bill, Republican Rep Raul Labrador of Idaho said he could not, but added: "I think there's enough people in the Republican Party who are willing to do that. And I think that's what you're going to see."

Mr McCarthy would not say what changes Republicans might make. He appeared to suggest that a very short-term measure might pass at the last minute, but Republican aides said that was unlikely.

Republicans argued that Mr Reid should have convened the Senate yesterday to act on the measure.

"If the Senate stalls until Monday afternoon instead of working today, it would be an act of breathtaking arrogance by the Senate Democratic leadership," said House speaker John Boehner yesterday.

"They will be deliberately bringing the nation to the brink of a government shutdown."

But even some Republicans said privately they feared Democratic Senate leader Mr Reid held the advantage in the fast-approaching end game.

Oil prices were lower amid jitters over the US budget battle.

Benchmark oil for November delivery fell 1.32 dollars to 101.55 a barrel at early afternoon Kuala Lumpur time in electronic trading on the New York Mercantile Exchange.

"The economy will slow down, confidence will slide and demand for crude will be hurt. There will be a real snowball effect if the partial shutdown goes ahead," said Evan Lucas, analyst with IG in Melbourne.

Goldman Sachs estimated that a three-week shutdown would slow the economy's annual growth rate in the October-December quarter by up to 0.9 percentage points. If so, the growth rate next quarter would be a scant 1.6%, compared with market expectations of a 2.5% growth.

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