U.S. government shutdown continues

The standoff that partially shut down the U.S. government today has persisted with no sign of a breakthrough.

The Democratic-led Senate rejected a House Republican effort to negotiate a solution to a dispute over the health care overhaul, so about 800,000 employees—about a third of the federal workforce—are being forced off the job in the first government shutdown in 17 years.

Many nonessential federal programs and services are also suspended. People classified as essential employees, like air traffic controllers and food inspectors, will continue to work.

Read: Government goes broke at midnight

The shutdown began when Congress missed a midnight deadline Monday to pass temporary funding bill, stalled by conservative efforts to push through a delay in President Barack Obama’s health law.

Senate Majority Leader Harry Reid said he would not negotiate as long as Republicans were holding up a straightforward spending bill to keep the government operating.

It’s not clear how long this impasse will last. The Senate vote yesterday afternoon marked the fourth time during this fight that it has rejected House Republican proposals, including an initial attempt to defund the health care program altogether.

House Republicans answered the latest Senate vote with a proposal for legislation to reopen some portions of the government, including iconic national parks like Yosemite and Yellowstone.

That party is still demanding concessions on health care, however. White House spokesman Jay Carney says that’s why its proposals were rejected as “not a serious approach” to finding a solution. He made this statement during a question period following President Obama’s speech at the Rose Garden this afternoon.

White House communications director Jennifer Palmieri told MSNBC that the administration is open to changes in the health care law in future negotiations, but not as part of passing a budget bill.

Stock markets around the world reacted resiliently today, with analysts saying significant damage to the U.S. economy was unlikely unless the shutdown lasted more than a few days. U.S. stocks edged higher, in fact, while European stocks mostly recovered after falling the day before the shutdown deadline. Asian stocks were mixed.

Read: Explaining the U.S. gov’t shutdown

In the House, conservative Rep. Marsha Blackburn predicted the standoff would drag for several days. “People are going to realize they can live with a lot less government,” she told Fox News.

The Republican leader of the House, Speaker John Boehner, said he didn’t want a government shutdown, but has insisted the health care law “is having a devastating impact.”

Looming ahead is a potentially more dangerous fight, given the Republicans are likely to take up the health care fight again when Congress must pass a measure to increase the nation’s debt ceiling. The U.S. risks a market-rattling, first-ever default on its obligations if Congress fails to raise that limit.

As spokesman Carney says, “The near threat of default was debilitating when it almost happened in 2011. The economy and markets went down and people couldn’t get jobs.” He notes the U.S. was downgraded for the first time as a result.

“Defaulting would have catastrophic consequences,” he adds, given the credit of businesses would dry up and interest rates could rise dramatically. “The consequences are unknowable, and would cast into question the faith and credit of the U.S.”

However, the president will not negotiate under threat of a prolonged shutdown or default, stressed Carney. He finds it’s the government’s responsibility to pay its bills, so the Republicans need to re-open government and stop being “irresponsible to the extreme [just] because they aren’t getting what they want.”

Currently, the White House is operating with minimal staff, and officials are discussing whether Obama should change travel plans while the shutdown is occurring.

As it stands, lawmakers and the president were still getting paid, at a rate totaling more than $250,000 per day. That has frustrated some Americans worried about the ripple effects of the shutdown.

Obama plans to meet with business leaders tomorrow, and will also speak about the potential economic impact of the shutdown on Thursday during a presentation aimed at small businesses across the nation.

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