Story Summary

Government shutdown

Let’s start with the obvious question: Will the government shut down this week? Most likely.

Republicans and Democrats can agree on that. It’s everything else that has them bickering and blaming. And unless they strike a deal on a spending bill Monday, the government will begin closing shop at 12:01 a.m. Tuesday.

GOVERNMENT SHUTDOWN: GET UP TO SPEED IN 20 QUESTIONS

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By David Simpson and Brianna Keilar, CNN

As the partial shutdown of the federal government enters its seventh day Monday, the countdown to a government debt default drops to ten days.

boehnerdebt

A default is widely regarded as a much bigger economic disaster than the shutdown of non-essential services. President Barack Obama has demanded that Congress raise the debt ceiling, and avoid default, without conditions.

But House Speaker John Boehner said Sunday there will be no debt limit increase, and no end to the partial shutdown, unless President Barack Obama and Senate Democrats negotiate with House Republicans.

Boehner told ABC News that President Obama and some objective observers are wrong about the number of House Republicans who would vote for a so-called “clean” continuing resolution to re-open the federal government without conditions.

“There are not the votes in the House to pass a clean CR,” the speaker said.

But Boehner also used his rare Sunday news show appearance to back away from insisting on repeal or delay of the Affordable Care Act, or “Obamacare,” as a condition for ending the shutdown and raising the debt limit.

Instead, Boehner said, he wants spending cuts through entitlement reform.

“My goal here is to have a serious conversation about those things that are driving the deficit and driving the debt up,” Boehner said. He said the retirement of the “baby boomer” generation will strain Social Security and Medicare beyond the breaking point if deficit spending is not reduced.

“We know these programs are important to tens of millions of Americans,” Boehner said. “But if we don’t address the underlying problems, they are not sustainable.”

Meanwhile, Treasury Secretary Jack Lew said on CNN’s “State of the Union” that the government risks more than its credit rating if the debt ceiling is not increased by Oct. 17. He dismissed suggestions that the government could avoid default by making only interest payments.

Lew said Social Security payments and veteran’s benefits also could be endangered.

“It’s very dangerous, it’s reckless,” Lew said.

David Simpson reported and wrote from Atlanta; Brianna Keilar reported from Washington.

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House Republicans won’t support raising the federal government’s borrowing limit without new spending cuts from the Obama administration, and the White House risks an unprecedented U.S. default by refusing, House Speaker John Boehner said Sunday.

Speaking six days into a partial government shutdown and 11 days before the Treasury Department expects to hit its statutory debt ceiling, Boehner told ABC’s “This Week” that he wants “a serious conversation” about spending, but no tax increases. Asked if the United States would default on debt payments unless President Barack Obama makes concessions, Boehner said, “That’s the path we’re on.”

“The votes are not in the House to pass a clean debt limit, and the president is risking default by not having a conversation with us,” said Boehner, R-Ohio.

Fiscal Cliff: Conservatives Blast Boehner Tax IncreasesBut speaking on CNN’s State of the Union, Treasury Secretary Jack Lew said Congress is “playing with fire” by threatening to leave the U.S. government unable to pay its creditors — a risk he called “unthinkable.”

“We’ve never gotten to the point where the United States government has operated without the ability to borrow,” Lew said. “It’s very dangerous. It’s reckless, because the reality is, there are no good choices if we run out of borrowing capacity and we run out of cash.”

Lew said the government has been managing to make payments since May by shifting money around, but it will run out of those options on October 17. Unless Congress votes to raise the debt ceiling, the federal government will be left with “a very, very short window of time” before it would have to stop cutting checks for Social Security recipients or disabled veterans and would undermine the full faith and credit of the U.S. government, he said.

In the 2011 debt-ceiling standoff, Congress and the administration agreed to $2 trillion in across-the-board spending cuts over a decade. Though default was narrowly averted, the crisis spurred one of the top three bond-rating houses, Standard and Poor’s, to cut the U.S. credit rating for the first time.

Government offices across the country shut down Tuesday after Republicans in the House held up the passage of a temporary spending bill, demanding changes or delays to Obama’s signature health care law. More than 800,000 federal workers have been on unpaid leave since then.

A CBS poll released last week shows a 72% majority of Americans disapprove of the government shutdown, with more Americans blaming GOP lawmakers than Obama. But Boehner told ABC he doesn’t have the votes to end the standoff without the Republican conditions on the Affordable Care Act, widely nicknamed “Obamacare.”

“I have 233 Republicans in the House, and you’ve never seen a more dedicated group of people who are thoroughly concerned about the future of our country,” he said. “They believe that Obamacare, all these regulations coming out of the administration, are threatening the future for our kids and our grandkids. It is time for us to stand and fight.”

Obama and his Democratic allies in Congress say all Boehner has to do is to bring to the floor a Senate-approved measure that temporarily funds the government, let Democrats and a handful of moderate Republicans vote for it, and the standoff ends. But after similar rounds of brinksmanship over the last increase in the debt ceiling, in 2011, and the expiration of the Bush tax cuts in December, the administration has refused to make new concessions to Republicans.

“In 2011, there was a very dangerous turn in the political debate in Washington,” Lew said. “You had the same 50 to 100 members who were really willing to default if they didn’t get their way. I’ve been through a lot of budget debates. I’ve been through a lot of debt ceiling debates. Never did I hear people who said, ‘If it don’t get my way, it’s better to default.’ That’s not acceptable now.”

House Republicans have responded by passing limited spending bills aimed at restoring funds to popular agencies, such as the Department of Veterans Affairs or the National Institutes of Health. Senate Majority Leader Harry Reid has refused to consider them, demanding that Republicans agree to fund government operations in full — leading Republicans to blame the president and Reid, D-Nevada, for the shutdown.

Texas Sen. Ted Cruz, a tea party-backed Republican seen as the architect of the new impasse, told CNN that many previous Congresses have attached conditions to debt-ceiling increases and accused Obama of hyping the risks of a default. He said Republicans should demand “some significant structural plan and reduce government spending” as a condition of raising the borrowing limit, as well as “ways to mitigate the harms from Obamacare.”

After soaring to more than $1.4 trillion in 2009, the annual federal budget deficit was expected to shrink below $650 billion in 2013, according to the nonpartisan Congressional Budget Office. But the total federal debt is nearly $17 trillion and is expected to go up by another $6 trillion by 2023, the CBO predicts.

Among the reasons for the shrinking deficits are increased tax collections since January, when Bush-era tax cuts for top earners and a temporary cut in Social Security withholding were allowed to expire. Boehner said that’s why he won’t accept tax increases in any deal.

“The president got $650 billion of new revenues on January the first … Now, it’s time to talk about the spending problem,” he said.
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Defense Secretary Chuck Hagel ordered most of the military’s civilian workers to return to work.

Hagel is bringing back nearly 400,000 Department of Defense employees based on the Pentagon’s interpretation of a bill the house passed Saturday.

The bill approved backpay for furloughed workers when the shutdown ends.

The stalemate on Capitol Hill continues, with the biggest issuing residing over the Affordable Care Act.

House Republicans voted to delay it for a year, but the Democrat-controlled Senate refused to go along with that.

The Senate isn’t expected to meet Sunday. The House is slated to return Monday.

That leaves a little more than a week until the deadline to raise the debt ceiling.

Treasury Secretary Jack Lew says the country will run out of money to pay its debts on October 17th.

By Tom Cohen, Deirdre Walsh and Ed Payne, CNN

U.S. foreign policy takes the latest hit as the government shutdown enters it’s fourth day.

With his focus on the brewing domestic crisis, the White House canceled President Barack Obama’s trip to the Asia-Pacific Economic Cooperation summit in Bali, Indonesia.

“The president made this decision based on the difficulty in moving forward with foreign travel in the face of a shutdown, and his determination to continue pressing his case that Republicans should immediately allow a vote to reopen the government,” a statement from the White House said.

Secretary of State John Kerry will lead the U.S. delegation in Asia.

The president’s bow from APEC comes as House Speaker John Boehner reportedly told fellow GOP legislators that he will rely on Democrats to pass a measure to raise the nation’s debt limit.

A House member shared the information with CNN after attending a meeting with Boehner on Wednesday. The lawmaker requested anonymity because the gathering was private.

Congressional Republicans remain divided on how to structure legislation to raise the government’s borrowing level. And an aide to the House speaker downplayed the development, saying, “Boehner has always said the United States will not default on its debt, so that’s not news.”

Still, at least one Democrat — Sen. Charles Schumer of New York — cheered the prospect of the GOP leader refusing to block at least this measure that President Barack Obama and his fellow Democrats strongly support.

“This could be the beginnings of a significant breakthrough,” Schumer said in a statement. “Even coming close to the edge of default is very dangerous, and putting this issue to rest significantly ahead of the default date would allow everyone in the country to breathe a huge sigh of relief.”

The potential breakthrough — at least on the debt limit — came two weeks before the government is set to run out of money to cover its roughly $16.7 trillion debt. If the debt ceiling isn’t bumped up, the country goes into default.

Conservative Republicans want budget cuts in exchange for upping the credit limit.

Boehner wrote this week in USA Today that “there is no way Congress can or should pass (a debt ceiling hike) without spending cuts and reforms to deal with the debt and deficit and help get our economy moving again.”

He accused the president of refusing to negotiate; Obama and fellow Democratic leaders have since said they are open to talks on any and all budgetary matters, but only after the government is reopened.

Obama challenges Boehner to allow ‘yes-or-no vote’ on shutdown

While Boehner’s comments suggest hope toward some common resolution on the debt ceiling, the government shutdown is another matter entirely.

The two sides appeared no closer to an agreement on Thursday. In fact, they appeared to dig in — insisting their approach is best and that the other was to blame for the government furloughs, the shuttering of national parks, the loss of funding for various programs and the other effects of the shutdown.

The conservative tea party wing of the GOP is demanding that any spending measure include provisions to dismantle or defund Obamacare, which became law in 2010 and was upheld by the Supreme Court last year.

The president again on Thursday called the strategy “reckless.”

The president said a spending initiative passed by the Democratic-led Senate that leaves his signature healthcare legislation out of the equation would pass the House with support from Democrats and some Republicans, except that Boehner won’t allow the vote.

“The only thing that is keeping the government shut down, the only thing preventing people from going back to work, and basic research starting back up, and farmers and small-business owners getting their loans — the only thing that’s preventing all that from happening right now today, in the next five minutes, is that Speaker John Boehner won’t even let the bill get a yes-or-no vote because he doesn’t want to anger the extremists in his party,” Obama said.

Senate Majority Leader Harry Reid was part of the Democratic chorus Thursday, accusing Boehner of reneging on an agreement to let the House vote on a “clean” spending package of $988 billion, $70 billion less than Democrats wanted). Boehner went back on that deal, Reid surmised in an interview with CNN’s Dana Bash, because he feared fellow Republicans would turn on him and oust him from his position as House speaker.

“His job is not as important as our country,” Reid said. “… He has to have some courage.”

Cantor: GOP should stand its ground

GOP Rep. Michael Grimm said Thursday night that “very, very arrogant and very obstinate” remarks by Reid and what he calls a lack of needed leadership from Obama undermines the chances of reaching a deal.

“If you’re going to be insulted …, and if you’re going to be spoken down to, and there’s going to be this air of arrogance, you’re only going to make things worse,” Grimm, of New York, told CNN’s Anderson Cooper.

While Grimm and a few other moderate Republicans have backed a “clean” spending bill without anti-Obamacare provisions, some of his colleagues in the House say the party won’t budge from their strategy. Rep. Tim Huelskamp of Kansas, for one, described his caucus as “very unified” and said Reid and Obama are “confused” if they think “we’re going to fold and let them win on everything.”

In fact, House Majority Leader Eric Cantor wrote in a memo that it’s the positions of Obama and other Democrats that are “untenable.”

House Republicans would continue passing piecemeal funding measures for popular programs such as veterans affairs, national parks and medical research to keep up pressure on Senate Democrats who refuse to consider such measures in the ongoing stalemate, Cantor’s memo said.

Proposal from moderates

Meanwhile, two moderate House members — one Republican and one Democrat — proposed a compromise Thursday that would fund the government for six months while eliminating a tax on medical devices in the health care reforms.

Senate Democrats quickly rejected the idea because it would link the health care reform provision to the need to fund the government now while extending deep mandatory budget cuts they oppose for half of the new fiscal year.

CNN’s Greg Botelho, Jason Hanna and Josh Levs contributed to this report.

TM & © 2013 Cable News Network, Inc., a Time Warner Company. All rights reserved.

By Deirdre Walsh, CNN

A small but growing group of House Republicans is increasingly worried about the fallout from the government shutdown and say it’s time for Speaker John Boehner to allow a simple vote on a spending bill.

Defunding Obamacare can wait for now, they say.

“I’m trying to be optimistic but at the same time I have a really, really tough time when people are out of work and they can’t pay their bills,” Rep. Michael Grimm of New York told reporters Wednesday. “Though it might be a political loss for us … this is an untenable situation.”

Rep. Scott Rigell, whose Virginia district is home to a significant number of military members and civilian contractors, was one of the first to publicly break away.

“We fought the good fight,” he said in a tweet on Tuesday, but acknowledged it was time to move on.

Boehner hosted small groups of concerned members on Wednesday. A spokesman for Boehner declined to talk about the sessions.

A Republican source familiar with one of Wednesday’s meetings said Boehner listened, but didn’t signal he was willing to allow a vote on a clean bill.

“They weren’t strong-armed, and they weren’t asked to step back,” the source said of the moderates in the meeting. It was taken as a positive sign that Boehner wasn’t trying to muzzle the effort.

Another House Republican source acknowledged that the group doesn’t yet have the numbers, muscle or will to force Boehner’s hand. To do so, they would need to stick together and vote with Democrats to block any piecemeal spending bills from coming up.

The only Republican to do that so far is Rep. Peter King of New York.

One of the Republicans who met with Boehner Wednesday told CNN they are giving him a bit more time to let things play out, but could decide to rebel by the end of the week.

White House meeting

There were no apparent breakthroughs during a midweek meeting at the White House between congressional leaders and President Barack Obama.

Descriptions of the meeting ran the gamut. Obama called the session “useful;” House Minority Leader Nancy Pelosi said it was “worthwhile” and Boehner cast it as a “polite conversation.” Senate Minority Leader Mitch McConnell, however, called it “unproductive.”

But the major players were all in the same room at the same time, talking to each other — something that hasn’t happened much in recent weeks.

Following Cruz’s playbook

As the shutdown lingers, some Republican moderates are openly frustrated that tea party darling Sen. Ted Cruz of Texas appears to be calling the shots on what House Republicans do next. Cruz was one of the first to suggest passing narrow bills that fund those government agencies or functions that generate any public backlash.

“I think the leadership is committed to play the Cruz strategy all the way out,” California Rep. Devin Nunes told reporters, before adding “if you can call it a strategy.”

For two days, GOP leaders have pushed through a series of piecemeal spending bills for floor votes that would fund things like veterans affairs, national parks and medical research. House Majority Leader Eric Cantor said Wednesday they plan to continue doing this.

“We’ve got ways to ease the pain on people,” Cantor said. “We agree on a lot around here. We ought to fund that, and then we ought to sit down and talk about that which we don’t.”

Still, the spending measures have no hope of passing, because the Democratic-led Senate won’t approve the bills and, even if they did, the White House has promised a veto.

Moderates meet

King hosted a group of mostly moderate GOP members in his office early Wednesday that want Boehner to allow a vote on a clean spending bill. He told reporters about 10 members attended, but said he believes there are about two dozen who would publicly back a clean spending plan — one that doesn’t try to strip the funding from President Barack Obama’s signature healthcare program.

“I could be wrong, but I think if you had a secret ballot, 180 would vote for a clean CR,” King said.

But it’s more likely that a shift in House GOP strategy won’t come in public defiance on the House floor, King said, but in quiet talks behind closed doors.

“Maybe it’s because I come from New York. I rely on back room meetings to get things done,” he said. “I’m hoping someone’s going to meet behind the scenes somewhere and we’re going to make a deal.”

One senior Republican familiar with the talks argued that the effort may be small now, but it is expanding, and will grow as more Republicans hear from constituents back home that are hurting from the shutdown.

“It’s Day 2 of the shutdown — we went from six or seven (members) to over 20 today,” the senior Republican told CNN.

Another GOP member familiar with the discussions told CNN they would only get serious if they stood together as a group to block a vote.

“The only way we’re going to get Boehner and Cantor to change course is if we can bring things to a halt,” said the source, who asked to speak anonymously while talks continue.

A perilous strategy

But it could be risky for these House Republicans to take a stand against the tea party faction of the GOP.

At the weekly lunch of the Republican Study Committee, a group of fiscal conservatives, the rumblings of the moderate GOP members came up. Some in the room said they should “go after” those fellow Republicans and put pressure on them to fall in line, according to a GOP source familiar with the discussions.

But another Republican congressional source in the meeting said the message was softer.

Members of the committee were encouraged to have “one-one-one converstations” with moderates to convince them to stick with the current GOP leadership strategy.

Nunes told reporters he expected the shutdown to go through the weekend and possibly through mid-October when Congress needs to raise the debt ceiling. He doesn’t think the current House Republican plan, which he repeatedly said is being dictated by Cruz, is helping the GOP cause of defunding or delaying Obamacare.

But he said he will vote for the smaller spending bills out of loyalty to Boehner, even as he criticized the group behind Cruz as “lemmings.”

“I’m going to continue to support our leadership. Even if we have entered the valley of death, when you enter the valley of death you have to keep running and the whole team has to stick together,” a frustrated Nunes told reporters outside the House floor.

King acknowledged the effort to get more Republicans to push for a clean spending bill could take some time and probably wouldn’t result in a new strategy until “the tea party has had enough.”

CNN’s Dana Bash and Alan Silverleib contributed to this story.

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The government shutdown threatened to keep dozens of Illinois veterans from getting to Washington, DC to visit the World War II Memorial.

Fred Yanno is an 89-year-old WWII vet and was among those on the Honor Flight from Midway Airport  to Washington D.C. this morning.  Before he took off, he said he was angry about the government shutdown that forced the closing of the WWII Veterans Memorial.  Yesterday veterans knocked down the barricade that kept them out.  Fred said he would break in if he had to.  It’s a trip he may never get to do again.

But Fred didn’t have to break down any barricade.  The government did not have the heart or maybe they didn’t want to deal with the wrath of the thousands of vets who visit here daily and kept the memorial open.

Fred and 90 other veterans from the second World War took part in the today’s Honor Flight, a program dedicated to flying vets for free to see the wall that bears the names of their colleagues who died.  It’s a beautiful solemn place to reflect on those who were killed.

But the past few days it has become more than that.  These vets who served our country are now feeling the effects of an ineffective government. And they don’t like it.

U.S. Senator Dick Durbin and Senator Mark Kirk, in his own wheelchair, met with veterans as well.

There’s late word that the Republican National Committee has put aside enough money to hire five security guards full time to keep the memorial open.

After weeks of talking past each other, congressional leaders and President Barack Obama talked to each other Wednesday evening — only to emerge evidently no closer to a deal to halt the government shutdown.

A White House meeting appeared to do little to do affect the stalemate between Republicans and Democrats, as leaders from both parties amplified their charged rhetoric by blaming each other for the impasse over funding.

Republicans, led by tea party conservatives in the House, have demanded that anti-Obamacare provisions be attached to any government spending plan, a strategy that Democrats have called a non-starter.

“At times like this, the American people expect their leaders to come together to find ways to resolve their differences,” House Speaker John Boehner said after what he described as a “polite conversation” over Washington’s fiscal stalemate. “The president reiterated one more time tonight that he will not negotiate.”

A few minutes later, Senate Majority Leader Harry Reid claimed that it was Boehner — not the president or his fellow Democrats — who have refused to talk.

Reid said Democratic leaders offered Boehner “a lifeline” by setting up negotiations “about anything that you want to talk about” so long as the House agrees to reopen the government first.

“I thought that they were concerned about the long-term fiscal affairs of this country. And we said, ‘we are too. Let’s talk about it,’” the Nevada Democrat said. “My friend, John Boehner … cannot take yes for an answer.”

The back-and-forth suggested little movement that the government shutdown that began Tuesday would lift anytime soon. Nor has there been any sign of a breakthrough of the next budget crisis — whether Congress votes to lift the nation’s debt ceiling.

In an interview with CNBC prior to the meeting, Obama said he was “prepared to negotiate on anything” regarding the federal budget — but only after Congress passes “a clean piece of legislation that reopens the government” and allows the “Treasury to pay for things that Congress itself already authorized.”

“Am I exasperated?” Obama said of Boehner, who is under pressure from fiscal hawks, and is refusing to let the House vote on the Senate-approved spending plan. “I am absolutely exasperated, because this is entirely unnecessary.”

CaptureObama and Democrats accuse Republicans of using the need to fund the government and increase the debt ceiling as leverage for defunding or delaying the Affordable Care Act, Obama’s signature legislative achievement.

“If we get in the habit where a few folks, an extremist wing of one party … are allowed to extort concessions based on a threat of undermining the full faith and credit of the United States, then any president that comes after me … will find themselves unable to govern effectively,” Obama said. “And that is not something that I’m going to allow to happen.”

Shutdown means furloughs for up to 800,000

The GOP-led House didn’t rest on its laurels Wednesday — pushing through piecemeal spending measures that would fund specific programs, though there’s no indication they will go anywhere in the Democratic-led Senate.

The incremental approach pushed by Sen. Ted Cruz of Texas seeks to pressure Democrats to approve spending for programs that Republicans like, but not Obamacare.

An initial effort Tuesday failed because the short-term proposals comprising a tiny portion of the overall federal budget lacked the necessary two-thirds majority support due to Democratic opposition.

But on Wednesday, the House did manage to pass — with majority support — bills to fund national parks, the National Institutes of Health and District of Columbia operations.

Obama has signaled he’d veto those measures should they reach his desk. That’s unlikely given that Senate Majority Leader Harry Reid has dismissed the approach as “reckless and irresponsible.”

Democratic Rep. Louise Slaughter of New York said the easiet solution was for the House to approve the spending proposal for the entire government sent over by the Senate, which lacks any of the anti-Obamacare provisions demanded by Cruz and his allies.

First shutdown in nearly 18 years

Both parties have refused to budge from their visions for the budget and, beyond that, health care reform. The Democratic-led Senate, for instance, has rejected four separate House GOP spending proposals that would either delay or defund Obamacare — insisting that the Republican-led House pass a Senate approved measure to continue funding the government without add-ons or qualifications.

In addition to the government shutdown — the first since a 21-day stalemate during the Clinton administration some 18 years ago — also looming is the October 17 deadline to raise the debt ceiling. Obama and congressional leaders all say that no one wants the stalemate to spread to that issue, which could mean a U.S. default. But no progress has occurred on finding a solution.

Writing Tuesday in USA Today, Boehner dug in his heels on the debt ceiling issue, saying “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 offered no indication that he’ll budge. Noting that such Republican brinkmanship in 2011 led to the first-ever downgrade of the U.S. credit rating, he said Tuesday he “will not negotiate over Congress’ responsibility to pay bills it’s already racked up.”

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.

So far, 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.

One problem is that conservative House Republicans from home districts with no realistic Democratic challenge feel emboldened to pursue a more extremist ideology backed by their supporters, he said.

“More people say raise the debt ceiling and fight the health care debate somewhere else,” CNN Chief National Correspondent John King noted. “But there’s enough here, if you think of a Republican going home to his district, there’s enough here to understand why the Republicans think they’re on safe ground dragging this out.”

One moderate Republican who has backed a clean spending measure, Rep. Michael Grimm of New York, said that “both sides have dug in.” Democrats, who he said “won’t even have a discussion,” put House Republicans in a tight spot where they feel compelled to hold their ground or else “set a bad precedent that the Senate would be somewhat dictating how the House runs.”

But if Democrats agreed to listen, Grimm expressed optimism “that we would put a package together and solve the problems at once, so we can get the government funded, stop the shutdown, and also deal with the debt ceiling so we don’t have another crisis a week or two away from now.”

Rep. Steny Hoyer of Maryland, the No. 2 Democrat in the House, told CNN that “we may be getting to a place where they’re going to be enough rational Republicans to join with the Democrats” and pass a short-term spending plan to reopen the government and allow for broader talks on funding for the rest of the new fiscal year. That would allow, he said, for a needed “cooling off period.”

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.

And it’s already had political ramifications extending beyond the United States. On Wednesday, Obama canceled planned visits next week to Malaysia and the Philippines as part of an Asian swing that will include a summit of the Association of Southeast Asian Nations on Bali. Obama will still attend the ASEAN summit, his office said.
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Terry Savage is an expert on personal finanace and the markets and author of the book, “The Savage Truth On Money” – she joined WGN Morning News for an interview

By Lisa Desjardins, CNN Capitol Hill reporter

In an extended shutdown, most of the federal workforce would go without pay, but the checks will keep coming to the 533 current members of Congress.

“That is disgraceful in my view,” said freshman Rep. Tulsi Gabbard, D-Hawaii, told CNN. “Basically the only people who get paid in a shutdown are members of Congress, and that is irresponsible.”

Gabbard plans to send any pay she receives during a shutdown back to the Treasury. The combat veteran said she was shocked to find out recently that members’ pay is protected.

It is — by the Constitution.

The 27th Amendment to the Constitution restricts any Congress from changing its own pay. The measure was proposed in the first days of the Republic but was not ratified until 1992, after a grass-roots movement promoted the idea and the necessary number of state legislatures approved it.

While many may have wanted to restrain Congress from increasing its pay, the amendment also blocks Congress from freezing or cutting its compensation.

The result? Congress gets paid no matter what. Gabbard is not the only member surprised.

“I don’t even know whether it stops or not,” Rep. John Fleming, R-Louisiana, said when asked about his pay during a shutdown.

When told that the Constitution mandates congressional paychecks stay as-is, Fleming responded that he hadn’t thought through what he would do yet but would likely donate his pay during a shutdown to charity.

“Obviously we need to share the pain of the American people,” he concluded.

The offices for the top two members of Congress — House Speaker John Boehner and Senate Majority Leader Harry Reid — wouldn’t respond to specifics about their pay.

According to a report by the Lexington Herald-Leader newspaper, Senate Minority Leader Mitch McConnell, R-Kentucky, plans to donate his salary to charity during the shutdown.

Rep. Pete Gallego, D-Texas, told CNN he is urging his fellow members of Congress to donate their pay to charitable causes.

“I don’t think we should get paid until (the shutdown) is resolved,” Rep. Pete DeSantis, R-Fla, told CNN’s Jake Tapper on Tuesday. “I’ve asked the clerk to withhold any pay for me until we get this up and running. I just think that that’s fair for the folks involved who’ve been negatively affected by this.”

House Minority Whip Steny Hoyer, D-Maryland, disagreed with DeSantis. “I think that’s another game (House Republicans) want to play, appealing to a demagogic approach to this,” Hoyer told Tapper on Tuesday.

“Members of Congress ought to be on the job working hard,” Hoyer added, “getting this job done to the American people, getting their government opened, getting federal employees back to work and serving the public, serving the growth of our economy, serving our national security ends.”

While members will get paid, they must decide which of their own office staff have to go home.

Members of Congress run their own office payroll and will decide who is essential and non essential. But even congressional staff members who work during a shutdown would not get paid until later — only their bosses will get paid on time.

“My staffers are working with pay. Right now,” Sen. Tom Coburn, R-Oklahoma, said Tuesday on “Crossfire.”

“They’re doing oversight on the federal government. … They’re continuing to work on the waste.”

Coburn also said he’s keeping his salary earned during the shutdown. “I’m going to keep my salary and going to make sure I spend it and tithe it and give to it charities and do the thing that I’ve always done. … I’m not going to stop working.”

But Democratic Sen. Debbie Stabenow of Michigan, who appeared alongside Coburn on “Crossfire” on Tuesday, is taking a different approach.

“Eighty percent of my staff, unfortunately, is on furlough,” she said, “I’m going to be contributing [my salary] on a daily basis. For every day we are not seeing an open — a government that’s open, I’m contributing.”

CNN’s Athena Jones, Tasha Diakides, and Martina Stewart contributed to this report.

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While up to 800,000 federal workers faced life without a paycheck as Day One of the government shutdown kicked in, Democrats and Republicans persisted in talking past each other without actually talking to each other to end the nation’s latest fiscal crisis.

The Republican-led House offered its latest gambit on Tuesday night but failed in separate votes to approve piecemeal funding for three specific programs — the District of Columbia, veterans affairs and national parks.

The votes required a two-thirds majority for passage, which would have required hefty Democratic support. That did not materialize, though House leadership aides say the plan is to bring up the same measures again Wednesday in a way that would require only a simple majority to pass.

Aside from conservative political calculations that calling these votes would put their ideological foes in a tough spot, it appears they’ll have little practical impact since the Democratic-led Senate wasn’t about to acquiesce and the White House promised a veto.

Senate Majority Leader Harry Reid derided the strategy as “just another wacky idea by tea party Republicans,” a clear example of the rhetorical firefights that have marked the latest pitched battle over spending. This one has been fueled by GOP efforts to condition any continued funding of the government with the elimination — or at least the delay — of Obamacare.

President Barack Obama weighed in Tuesday, the start of the fiscal year, by lambasting the Republicans for being “reckless” in their apparent 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, then saw it upheld by the Supreme Court last year.

Saying the shutdown’s goal is to hinder government efforts to provide health insurance to 15% of the U.S. population that doesn’t have coverage, the president said it was “strange that one party would make keeping people uninsured the centerpiece of their agenda.”

“Republicans in the House of Representatives refused to fund the government unless we defunded or dismantled the Affordable Care Act,” he said, flanked by people who the White House said had benefited from the health care reform.

Reid, for one, indicated he’s open to working with the House on budgetary matters — “but not with the government closed” and not by making it all about the legislation widely known as Obamacare.

Until then, he and other Democrats pushed for the House to pass a “clean” spending plan to fund the government for a few months before negotiating over parts of the health care law.

First shutdown in nearly 18 years

The latest shutdown was not the first for the government. The last time it happened, 18 years ago during the Clinton administration, the stalemate lasted 21 days.

Now, the House and Senate have both refused to budge from their visions for the budget and, beyond that, health care reform.

The Senate began its day on Tuesday by rejecting a GOP counteroffer that would have delayed Obamacare for a year and ended federally provided health care for the president, members of Congress and their staffs while funding the government for 11 weeks.

The House GOP plan also called for a conference committee, which usually results 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.

On the Republican side, Rep. Darrell Issa of California told CNN that 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.

Even if there was somehow an agreement for a month, Congress would have another crisis on its hands: whether or not to raise the debt ceiling by October 17, when the U.S. government is set to run out of money to pay creditors unless it increases how much it can borrow.

Writing in USA Today, House Speaker John Boehner dug in his heels saying “there is no way Congress can or should pass such a bill without spending cuts and reforms to deal with the debt and deficit.”

Yet Obama offered no indication that he’ll budge. Noting that such Republican brinkmanship in 2011 led to the first-ever downgrade of the U.S. credit rating, he said he “will not negotiate over Congress’ responsibility to pay bills it’s already racked up.”

“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,” the president said. “Nobody gets to hurt our economy and millions of hard-working families over a law you don’t like.”

‘The rest of the country thinks we’re crazy’

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 tied to Sen. Ted Cruz of Texas who “really care about nothing but their own agenda” driving the Republican approach in the House.

“We have people in the conference, I believe, who’d be just as happy to have the government shut down,” said King, who has been among the Republican legislators pushing for a “clean” funding bill without anti-Obamacare provisions. “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.”

Public reaction

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%.

King, the New York Republican, said there’s plenty of blame to go around — from Cruz, whom he called a “fraud,” and his tea party allies to the president for not being more engaged in resolving this crisis.

“Let him say he won the battle,” King said of Obama. “I don’t care who wins the battle. I want the government to reopen.”
TM & © 2013 Cable News Network, Inc., a Time Warner Company. All rights reserved.

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