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Federal budget deadlock could stretch into debt-limit fight

WASHINGTON — Washington began bracing for a prolonged government shutdown on Tuesday, with House Republicans continuing to demand that the nation's new health care law be delayed or repealed and President Barack Obama and the Democrats refusing to give in.

There were signs on Capitol Hill that Republicans — knowing that blame could fall most heavily on them — are beginning to look for ways to lift some of the pressure.

House GOP leaders pushed a new approach to end the impasse, offering to fund some parts of the government — including national parks, veterans benefits and the District of Columbia government. The goal was to put Democrats on the spot by trying to make them vote against programs that are popular among their constituents.

Senate Democratic leaders and the White House quickly rejected the piecemeal strategy. And in a series of evening votes, Democrats helped defeat the measures on the House floor.

Around the country, barricades and padlocks closed off access to federal facilities as the vast machinery of the federal government began systematically shutting down operations for the first time in nearly two decades.

Americans seeking a variety of services at federal buildings found the doors shuttered, with no indication of when they might reopen. Federal employees braced for an uncertain financial future in the days ahead as their employers turned out the lights. Tourists found their vacation plans dashed at the entrances to hundreds of national parks and monuments.

At the Statue of Liberty in New York, tourists from Norway and Beijing were prevented from getting close to the monument of freedom.

Stocks on Wall Street closed slightly higher, while European and Asian stocks were mixed. Bond and foreign exchange markets were quiet.

In Washington, Obama made his second appearance in as many days to call on Republicans to fund the government. He was flanked in the White House Rose Garden by about a dozen uninsured people who will be eligible for benefits under the Affordable Care Act, which took effect Tuesday. The legislation, often derided by critics as Obamacare, remains unpopular, but polls suggest that the idea of closing the government to stop it is even more so.

"This shutdown is not about deficits. It's not about budgets," Obama said. "This shutdown is about rolling back our efforts to provide health insurance to folks who don't have it."

At the moment, neither side is feeling a clear imperative to end the shutdown. Republican leaders prefer keeping the government closed to compromising on health care. And, with polls showing that voters generally blame Republicans for the stalemate, Democrats, too, are willing to let it drag on.

Aside from a 10-minute phone call Monday, Obama and House Speaker John Boehner, R-Ohio, are not talking. Nor is Boehner meeting with Senate Majority Leader Harry Reid, D-Nev.

Unlike most GOP House members, Sen. Tom Coburn of Oklahoma lived through the prolonged shutdowns of 1995 and early 1996. Although the ardently conservative Coburn sympathizes with the more junior lawmakers' strong opposition to the health care law, he says their shutdown strategy will end badly for Republicans.

"What they're going to do, they're going to dig in harder until the pain becomes so bad they yell uncle," he said. "And it isn't going to be pain from the president, it's going to be pain from their own constituents."

At least 12 House Republicans say they would vote in favor of a "clean" spending bill — one that simply keeps the government open for two more months, without any language about defunding or delaying the health care law. It is hard to say whether that is the beginning of a trend, and it is also well short of the number that would be needed to persuade the speaker to bring such a bill to the floor.

If the shutdown lasts a couple of weeks — a prospect that looks possible — it will take lawmakers right into a bigger crisis: the expiration of federal borrowing authority. Republicans are hoping to use that deadline to gain concessions from Obama, who has said that he will not negotiate over the nation's solvency.

Treasury Secretary Jack Lew has said he will begin running short of cash to pay the nation's bills unless Congress acts by Oct. 17. That would raise the virtually unthinkable prospect of a default on U.S. debt.

Lawmakers in both parties predicted that if the shutdown stretches into the weekend, efforts to end it will become part of a larger negotiation over raising the federal debt limit.

The first partial closure of the government in nearly 18 years began at 12:01 a.m. Tuesday, when the new fiscal year started, forcing 800,000 federal employees out of work indefinitely and closing federal offices and services not deemed vital.

This report contains information from the New York Times.

Federal budget deadlock could stretch into debt-limit fight 10/01/13 [Last modified: Wednesday, October 2, 2013 12:30am]
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