The US government has begun a partial shutdown after the two houses of Congress failed to agree a new budget.
The Republican-led House of Representatives insisted on delaying President Barack Obama’s healthcare reform – dubbed Obamacare – as a condition for passing a bill.
More than 700,000 federal employees face unpaid leave with no guarantee of back pay once the deadlock is over.
It is the first shutdown in 17 years and the dollar fell early on Tuesday.
Goldman Sachs estimates a three-week shutdown could shave as much as 0.9% from US GDP this quarter.
The White House’s budget office began notifying federal agencies to begin an “orderly shutdown” as the midnight deadline approached.
Shortly after midnight, President Barack Obama tweeted: “They actually did it. A group of Republicans in the House just forced a government shutdown over Obamacare instead of passing a real budget.”
House Speaker John Boehner told reporters he hoped the Senate would agree to a committee between the two chambers known as a conference “so we can resolve this for the American people”.
“The House has voted to keep the government open but we also want basic fairness for all Americans under Obamacare,” he said.
The Senate is to meet again at 09:30 (13:30 GMT) on Tuesday.
The divide in US politics has grown so bitter that government itself cannot function.
Adapted From BBC