The Democratic-led US Senate has voted to reject the latest proposal by the Republican-led House of Representatives to negotiate on the budget as the government has begun a partial shutdown.
On Tuesday morning, the Senate voted down 54-46 another spending deal from GOP-controlled House requesting for a conference to resolve differences.
It was the fourth time during the budget standoff that the Senate Democrats voted to reject a spending plan by House Republicans.
The government shutdown was triggered amid political wrangling on Capitol Hill after the Senate repeatedly blocked spending bills from the House of Representatives with a provision to defund President Barack Obama’s controversial healthcare plan known as Obamacare leading to the first government shutdown in 17 years.
Republicans are insisting on delaying Obamacare as a condition for passing a bill.
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, AP has reported.
According to some estimates, over 800,000 federal employees face unpaid leave with no guarantee of back pay when the deadlock is over while other estimates say upwards of 1 million workers face unpaid leave.
Goldman Sachs has estimated that a two-day shutdown could cut as much as 0.1 percent from the US GDP in this year’s fourth quarter while a one-week long shutdown could slash as much as 0.3 percent.
Before the shutdown took effect, credit rating agency Standard & Poor’s said “The current impasse over the continuing resolution and the debt ceiling creates an atmosphere of uncertainty that could affect confidence, investment, and hiring in the US.”
It added that “This sort of political brinkmanship is the dominant reason the rating is no longer ‘AAA’.”
With prospects of a swift resolution to the crisis seem unclear what is certain is that the poor and average Americans are going to be hit the hardest. But the worse could be coming on 17th of October as a looming debt ceiling may see the US default on its debt.