U. S.: LATEST HOUSE BID FAILS AS BITTER......

Latest House bid fails as bitter back-and-forth over government shutdown rages

By Holly Yan and Tom Cohen, CNN

October 2, 2013 -- Updated 0216 GMT (1016 HKT)

Obama: GOP holding economy hostage

STORY HIGHLIGHTS

NEW: "I don't care who wins the battle. I want the government to reopen," GOP Rep. King says
Lawmakers continue to talk over each other; Obama weighs in on Day One of shutdown
Agencies begin furloughs that could eventually impact up to 800,000 workers
Aides: GOP plans again to bring up bills in House to fund programs piecemeal

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Washington (CNN) -- While up to 800,000 federal workers faced life without a paycheck as Day One of the government shutdown kicked in, Democrats and Republicans persisted in talking past each other without actually talking to each other to end the nation's latest fiscal crisis.

The Republican-led House offered its latest gambit on Tuesday night but failed in separate votes to approve piecemeal funding for three specific programs -- the District of Columbia, veterans affairs and national parks.

The votes required a two-thirds majority for passage, which would have required hefty Democratic support. That did not materialize, though House leadership aides say the plan is to bring up the same measures again Wednesday in a way that would require only a simple majority to pass.

Aside from conservative political calculations that calling these votes would put their ideological foes in a tough spot, it appears they'll have little practical impact since the Democratic-led Senate wasn't about to acquiesce and the White House promised a veto.
Parks, museums: Sorry, we\'re closed Parks, museums: Sorry, we're closed
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Photos: Key players in the shutdown debate Photos: Key players in the shutdown debate
Photos: The last government shutdown Photos: The last government shutdown
Tea Party reacts to shutdown
Boehner: President 'won't negotiate'

Senate Majority Leader Harry Reid derided the strategy as "just another wacky idea by tea party Republicans," a clear example of the rhetorical firefights that have marked the latest pitched battle over spending. This one has been fueled by GOP efforts to condition any continued funding of the government with the elimination -- or at least the delay -- of Obamacare.

President Barack Obama weighed in Tuesday, the start of the fiscal year, by lambasting the Republicans for being "reckless" in their apparent willingness to take down the government in order to take down the law overhauling major aspects of health care coverage. He championed the law, signed it in 2010, then saw it upheld by the Supreme Court last year.

Saying the shutdown's goal is to hinder government efforts to provide health insurance to 15% of the U.S. population that doesn't have coverage, the president said it was "strange that one party would make keeping people uninsured the centerpiece of their agenda."

"Republicans in the House of Representatives refused to fund the government unless we defunded or dismantled the Affordable Care Act," he said, flanked by people who the White House said had benefited from the health care reform.

Reid, for one, indicated he's open to working with the House on budgetary matters -- "but not with the government closed" and not by making it all about the legislation widely known as Obamacare.

Until then, he and other Democrats pushed for the House to pass a "clean" spending plan to fund the government for a few months before negotiating over parts of the health care law.

First shutdown in nearly 18 years

The latest shutdown was not the first for the government. The last time it happened, 18 years ago during the Clinton administration, the stalemate lasted 21 days.

Now, the House and Senate have both refused to budge from their visions for the budget and, beyond that, health care reform.

The Senate began its day on Tuesday by rejecting a GOP counteroffer that would have delayed Obamacare for a year and ended federally provided health care for the president, members of Congress and their staffs while funding the government for 11 weeks.

The House GOP plan also called for a conference committee, which usually results from competing legislation from the two chambers on major issues, rather than a short-term continuing resolution intended to keep the government running for a few weeks.

Democratic Sen. Dick Durbin of Illinois, a leading liberal voice, told CNN that he is open to negotiations with the House on at least one specific provision of Obamacare -- a tax on medical devices that some in both parties oppose.

However, Durbin echoed the position of Reid that such negotiations must be separated from the spending impasse that has shut down the government.

On the Republican side, Rep. Darrell Issa of California told CNN that he could vote to fund the government for a few days or weeks to provide time for a conference committee to work out a compromise.

Even if there was somehow an agreement for a month, Congress would have another crisis on its hands: whether or not to raise the debt ceiling by October 17, when the U.S. government is set to run out of money to pay creditors unless it increases how much it can borrow.

Writing in USA Today, House Speaker John Boehner dug in his heels saying "there is no way Congress can or should pass such a bill without spending cuts and reforms to deal with the debt and deficit."

Yet Obama offered no indication that he'll budge. Noting that such Republican brinkmanship in 2011 led to the first-ever downgrade of the U.S. credit rating, he said he "will not negotiate over Congress' responsibility to pay bills it's already racked up."

"I'm not going to allow anybody to drag the good name of the United States of America through the mud just to refight a settled election or extract ideological demands," the president said. "Nobody gets to hurt our economy and millions of hard-working families over a law you don't like."

'The rest of the country thinks we're crazy'

At the heart of the issue is the insistence by House Republicans that any spending plan for the new fiscal year include anti-Obamacare amendments. Senate Democrats are just as insistent that it doesn't.

Obamacare isn't directly tied to funding the government. But it's so unpopular among the Republican tea party conservatives that they want it undercut, if not outright repealed. For instance, this week Republican Rep. Todd Rokita of Indiana called it "the most insidious law known to man."

Both Democrats and Republicans say that a clean spending measure -- with no Obamacare amendments, as urged by the president and his allies -- would pass the House with support from the Democratic minority and moderate Republicans.

Veteran GOP Sen. John McCain of Arizona noted that any attempt to repeal Obamacare was going to fail because of Obama's veto, which would require a two-thirds majority in the Senate to overcome. And GOP Rep. Peter King of New York said the problem is tea party conservatives tied to Sen. Ted Cruz of Texas who "really care about nothing but their own agenda" driving the Republican approach in the House.

"We have people in the conference, I believe, who'd be just as happy to have the government shut down," said King, who has been among the Republican legislators pushing for a "clean" funding bill without anti-Obamacare provisions. "They live in these narrow echo chambers. They listen to themselves and their tea party friends. That keeps them going, forgetting that the rest of the country thinks we're crazy."

However, Boehner has succumbed to pressure from the tea party right to avoid a vote that would pass something without causing some harm to the health care reforms.

Speaking in the early minutes of the shutdown, the Ohio Republican insisted the House voted "to keep the government open" and assure "fairness for all Americans under Obamacare" -- then walked away from the podium.

White House spokesman Jay Carney told CNN such intransigence is the root of the shutdown, noting that conservative Republicans such as Rokita are the only ones pushing a political agenda for meeting the congressional responsibility of passing a budget.

Amid the finger-wagging and fulminating, major components of the new health insurance law went into effect on schedule on Tuesday.

"The Affordable Care Act is moving forward. You can't shut it down," said a post on Barack Obama's verified Twitter feed.

A blow to the economy

The shutdown of the government -- the country's largest employer -- isn't happening all at once.

Federal employees who are considered essential will continue working. Those deemed non-essential -- up to 800,000 -- could be furloughed, unsure when they'll be able to work or get paid again.

The shutdown could cost the still-struggling U.S. economy about $1 billion a week in pay lost by furloughed federal workers. And that's only the tip of the iceberg.

While many agencies have reserve funds and contingency plans that would give them some short-term leeway, the economic effect would snowball as the shutdown continued.

The total economic impact is likely to be at least 10 times greater than the simple calculation of lost wages of federal workers, said Brian Kessler, economist with Moody's Analytics. His firm estimates that a three- to four-week shutdown would cost the economy about $55 billion.

Initial market reaction around the world indicated little serious concern for now. In New York, all the major indexes were higher on Tuesday after closing lower the day before. World markets also rose, while the dollar slipped against other major currencies.

Troops, congressional paychecks safe

Although much of the federal workforce will go without pay, checks will keep coming to the 533 current members of Congress. The president too will get paid. His salary -- $400,000 -- is considered mandatory spending.

Some members of Congress and government officials have said they will donate their salary to charity during a shutdown.

Members of the military will also get paid -- thanks to Congress, which unanimously managed to come together to pass a bill that Obama signed.

But it's uncertain how the shutdown will affect veterans, including the 3.3 million who are disabled. If the shutdown stretches into late October, the Veterans Affairs Department could have to halt disability and pension checks for elderly and ill veterans.

"That's what they need to pay rent, to pay food," said Tom Tarantino of the Iraq and Afghanistan Veterans of America. "It's not their total income, but it is a significant part of it."

10 ways the shutdown would affect you

Public reaction

A game of chicken between Dems, GOP

According to a CNN/ORC poll, 68% of Americans think shutting down the government for even a few days is a bad idea, while 27% think it's a good idea.

And it appears most Americans would blame congressional Republicans for a shutdown: Sixty-nine percent said they agreed with the statement that the party's elected officials were acting like "spoiled children."

Democrats, however, weren't far behind: Fifty-eight percent of respondents said they, too, were acting like spoiled kids.

Another poll showed public support for Congress at record low levels -- at 10%.

King, the New York Republican, said there's plenty of blame to go around -- from Cruz, whom he called a "fraud," and his tea party allies to the president for not being more engaged in resolving this crisis.

"Let him say he won the battle," King said of Obama. "I don't care who wins the battle. I want the government to reopen."

CNN Poll: GOP would bear the brunt of shutdown blame

Meet the man behind the government shutdown

CNN's Greg Botelho, Lisa Desjardins, Poppy Harlow, Lateef Mungin, Dana Bash, Z. Byron Wolf, Chris Isidore, Ted Barrett, Deidre Walsh, Barbara Starr, Sophia Yan, Ed Payne and John Helton contributed to this report.