US braces for shutdown a week before budget deadline

 In this Sept. 16, 2013, photo, President Barack Obama speaks in the South Court Auditorium on the White House complex in Washington. The current fiscal year ends on Sept 30, and Congress remains bitterly split over spending, and in particu
 In this Sept. 16, 2013, photo, President Barack Obama speaks in the South Court Auditorium on the White House complex in Washington. The current fiscal year ends on Sept 30, and Congress remains bitterly split over spending, and in particular over President Barack Obama's landmark health care law. -- FILE PHOTO: AP 

WASHINGTON (AFP) - The White House warned US federal agencies on Monday to prepare for a possible government shutdown that could hobble the US economy, as Congress wrangled over a budget deadline.

The current fiscal year ends on Sept 30, and Congress remains bitterly split over spending, and in particular over President Barack Obama's landmark health care law.

The Republican-led House of Representatives passed a bill last week that would prevent a shutdown at the price of defunding "Obamacare," the president's health reform.

Mr Obama has warned that this is a non-starter, and now the House and Senate are left with one week to thrash out a compromise.

If the fail, several government agencies and their programmes will close their doors on Oct 1, placing hundreds of thousands of non-essential staff on unpaid leave.

Agencies are finalising contingency plans.

The Pentagon said some civilian employees would be ordered on unpaid leave, and Congress would have to ensure retroactive pay for civilians required to come to work.

"Military personnel would be paid but maybe not on time," Pentagon spokesman George Little said.

The White House's Office of Management and Budget issued a 20-page memo on how agencies should plan for a "lapse in appropriations." The State Department also warned its employees.

Undersecretary for Management Patrick Kennedy fired off a memo warning that such a lapse could mean that "a number of employees may be temporarily furloughed." Under a similar threat in 2011, the White House said 800,000 of roughly 2.1 million federal employees and contractors would be affected.

The Democratic-led Senate is expected to amend the House's stopgap bill, which funds government at current levels until Dec 15, by removing the clause defunding Obamacare.

Senate Majority Leader Harry Reid opened what will be several days of intense debate in the chamber, and set up a likely test vote for the bill on Wednesday.

But Mr Reid insisted he would not let a group of Republican "fanatics" achieve "take the federal government and our economy hostage to their demands."

"We're not going to bow to Tea Party anarchists who deny the mere fact that Obamacare is the law," Mr Reid said.

If Mr Reid gets his way, and he is likely to, the chamber would then send the legislation back to the House. What Speaker John Boehner and his caucus do with it is an open question.

Americans are firmly opposed to shutting down government, polls show, even over an unpopular health law.

A new CNBC poll showed 59 per cent oppose the idea, while 19 per cent would support shutting down government rather than funding Obamacare.

The US government has shut down several times since the mid-1970s, sometimes for as little as three days.

The last two shutdowns happened in November and December of 1995, the second lasting 21 days, when another Democratic president, Bill Clinton, faced a Congress controlled by rival Republicans.

The budget fight pitted Clinton against Republican House speaker Newt Gingrich, with the president ultimately vetoing a draft spending bill he saw as too austere.

But at the time Republicans controlled both chambers of Congress.

"Republicans now are in a much weaker position than they were in 1995," University of Oklahoma history professor Steve Gillon told AFP. "But they're pursuing the same strategy." In 1995, essential services like military operations, air traffic control and border security were uninterrupted, but programmes not considered essential were shuttered.

Garbage piled up in Washington. Research at the National Institutes of Health ground to a halt, and most visa processing was suspended.

One of the most visible effects was on tourism: all 368 sites managed by the National Park Service closed, as did the Smithsonian museums, disappointing seven million tourists.

When the dust settled, Mr Clinton's stock rose and Mr Gingrich was largely blamed for the debacle - although he argues that the compromise resolution led to four straight years of balanced budgets.