Obama shows frustration as government shut-down looms

Published on Thursday 7 April 2011 18:09

Politicians in the United States are facing a race against time to agree billions of dollars in budget cuts ahead of a deadline that would see a government shut-down from tonight.

Republican and Democrat leaders were hauled in front of President Barack Obama yesterday at a White House meeting aimed at finding a last-ditch solution to end the impasse. But both sides appeared entrenched.

Failure to reach a compromise could see hundreds of thousands of government employees sent home without pay, with a raft of services stopped as a result.

Any shutdown is likely to knock the US's fragile economic recovery - it could also have far-reaching political fall-out. At stake is the credibility of the president as a dealmaker, as well as the standing of both political parties in the eyes of their grass-roots supporters.

The current stand-off is the result of a failure by politicians in Washington to agree cuts from a discretionary budget that last year topped $1.3 trillion.

A series of stop-gap measures has kept government going over the last few months. But a mini-budget agreed three weeks ago is due to expire at midnight tonight, with no agreement over how to finance government until the end of fiscal year in September. A further stop-gap bill being readied by House Republicans is likely to be rejected by the president.

Negotiators are focusing on spending cuts amounting to between $33 billion to $40bn. But even if a headline figure is agreed on, a series of additional policy provisions put forward by Republicans in Congress could scupper any deal.

Among these "riders" are measures that would block the funding of Mr Obama's healthcare reforms, halt climate-change regulations being enforced and prevent money going to birth control clinics.

Pushed by conservatives in the Republican Party, the provisions are proving to be a stumbling block in the negotiations.

A shut-down would result in around 800,000 government employees being sent home without pay and barred from working. Services such as passport applications and tax returns would be affected, and museums and parks closed down.

The last government shut-down took place in the mid-1990s when Bill Clinton vetoed a Republican spending bill. Lasting 27 days, it cost taxpayers an estimated $1.5bn.

The political upshot of that stand-off was a boost in the popularity of Mr Clinton at the expense of then Republican House speaker Newt Gingrich.

Until this week, Mr Obama has largely taken a back-seat in the current negotiations.

But with time running out, he has increasingly played the role of a frustrated mediator.

He said: "You want everybody to act like adults, quit playing games, realise it is not just 'My way or the highway'."

Mr Obama met Democrat Senate majority leader Harry Reid and Republican House speaker John Boehner in the White House on Wednesday.

After the meeting, the president said he remained "confident" that a solution could be found. But positions have seemingly become more entrenched as the deadline nears.

On Thursday political leaders exchanged bitter remarks as they appeared to retreat to their own corner.

A poll for the Wall Street Journal and NBC News found that Americans are spreading the blame. More than a third of those asked said the failure to find a compromise was the fault of Republicans, with 20 per cent pointing the finger at the Democrats, and a further 20 per cent blaming the president.