The Republican party’s plan to reopen portions of the U.S. government has been officially shut down by the White House, continuing the first government shutdown in 17 years, which began at midnight. Until an agreement regarding health care between President Obama and Republicans can be made, national landmarks like the Statue of Liberty will be closed, and countless federal employees will remain out of work.
Obama has accused Rebulicans of taking the government hostage in an attempt to sabotage his signature health care law, the Affordable Care Act. Also known as “Obamacare,” the ACA is the most ambitious U.S. social program that’s been created in fifty years.
“They’ve shut down the government over an ideological crusade to deny affordable health insurance to millions of Americans,” stated Obama in the White House Rose Garden.
The Republicans in the House of Representatives consider the Affordable Care Act a dangerous extension of government power, so they have tried to undermine it with continued government funding, despite repeated rejections from the democratic-controlled Senate. Republicans have voted more than 40 times to repeal or delay “Obamacare,” but they failed to block the launch of its online insurance marketplaces this morning.
When the Republicans proposed a plan earlier today that would restore funding for federal parks, veterans programs and the District of Columbia, and would also raise the debt limit, the White House immediately rejected the offer – White House spokesman Jay Carney stated that the proposal “shows the utter lack of seriousness that we’re seeing from Republicans.”
We can’t yet be sure if the shutdown will merely be another bump in the road for a Congress or a sign of a more alarming breakdown in the political process until we’re able to see the reaction among voters and on Wall Street, but so far, the market appears to be taking the news in stride and investors are confident a deal can be reached quickly. U.S. stocks were higher in afternoon trading with the S&P 500 up 0.5 percent and the Nasdaq Composite gaining 0.8 percent. However, the U.S. Treasury was forced to pay the highest interest rate in 10 months on its short-term debt, as many investors avoided bonds that would be due later this month, when the government is due to exhaust its borrowing capacity.
According to Goldman Sachs, a week-long shutdown could potential slow U.S. economic growth by about 0.3 percentage points. A longer disruption could weigh on the economy more heavily, as furloughed workers start to scale back on personal spending. Congressional researchers believe that the last shutdown in 1995 and 1996 cost taxpayers $1.4 billion.