The U.S. federal government on Tuesday lurched into a partial shutdown, the first in 17 years, as American lawmakers failed to agree to a spending bill for keeping the federal government running beyond midnight Monday.
A shutdown doesn't mean the whole government will come to a halt -- spending for essential functions related to national security and public safety will continue while federal employees of non-essential services will face being furloughed to reduce an immediate and critical effect of a government-wide closedown.
Up to 1 million federal employees of non-essential services will be furloughed, including those in the federal tax agencies, departments of Justice, Labor and the Treasury, and Environmental Protection Agency.
The U.S. Supreme Court would probably operate normally, and federal courts will remain open for about 10 business days and their status will be reassessed on or about Oct. 15.
The Federal Reserve and other financial agencies and sectors such as mail delivery and air travel will also stay open as it does not depend on congressional appropriations or tax dollars for day-to-day operations.
The defense department and other sectors such as space travel and tourism will probably took a hard blow.
Though all military personnel will remain on normal duty status to ensure national security, the Pentagon will idle about half of its 800,000 civilian employees.
NASA, the government agency responsible for space travel and the scientific study of space, will put some 97 percent of its 18,000 workers on unpaid leave.
National parks and tourist spots in Washington D.C. have been closed.Overnight visitors to the parks will be given two days to depart.
"A brief shutdown is disruptive, but not likely a systemic macro event," said David Stockton, a senior fellow at the Peterson Institute for International Economics (PIIE), at an event on the first day of the partial shutdown of the U.S. federal government agencies.
However, if U.S. Congress fails to meet a mid-October deadline to raise the country's debt ceiling, it will be "a major macro systemic event" and will lead to financial volatility and depressed household and business confidence, he stressed.
U.S. stocks ended higher Tuesday after Monday's slip, shrugging the government shutdown, as investors expected the shutdown may help delay the Federal Reserve's plan to taper its money easing policies.
The Dow Jones Industrial Average gained 62.03 points, or 0.41 percent, to 15,191.70 points. The Standard & Poor's 500-stock Index added 13.45 points, or 0.80 percent, to 1,695.00 points. The Nasdaq Composite Index surged 46.50 points, or 1.23 percent, to 3, 817.98 points.
Oil prices continued to drop Tuesday amid speculation that a partial U.S. government shutdown may hurt the economy and dampen fuel use.
Light, sweet crude for November delivery decreased 0.29 dollars to settle at 102.04 dollars a barrel on the New York Mercantile Exchange. Brent crude for November delivery lost 0.43 dollars to close at 107.94 dollars a barrel.
