PARIS – The United States woke up Tuesday to a rather expected, but nonetheless stunning government shutdown after Congress failed to agree on a new budget by the midnight deadline in a political standoff over Republican attempts to reverse President Obama's landmark health care reform.
The government is forced to put an end to non-essential services, an estimated 800,000 federal employees face unpaid leave beginning Tuesday, with no guarantee of back pay once the deadlock is over.
Goldman Sachs estimated that the U.S. could lose as much as 0.9% of its GDP this quarter if the shutdown lasted three weeks. This domestic political row from the world's largest economy and, er, temporarily lamest democracy are bound to have reverberations around the world.
British Prime Minister David Cameron told the BBC radio: "It is a risk to the world economy if the United States can't properly sort out its spending plans and its deficit reduction plans."
The shutdown is the leading story on many top global news outlets:
Commentators are chiming in:
- In French daily Le Figaro, Pierre-Yves Dugua writes: "The U.S. is being humiliated by the inability of its political system to carry out its primary mission: to pass a budget."
- In Germany's leading business daily Frankfurter Allgemeine Zeitung, Patrick Welter writes: "The failure to reach agreement casts a dark shadow on the next and more important forthcoming round in the fiscal row."
- Andrew Coyne of Canada's National Post adds: "Today’s crisis is driven not by the leadership or even the majority of the Republican party, but by an intense and disciplined minority, itself a product of the changes that have overtaken the country in recent years.