US President Barack Obama has accused Republicans of pandering to the "extreme right wing'' of their party and holding Americans hostage in a budget dispute threatening to shutter the US government.

Just over six hours before government services grind to a halt (due 5pm NZ time) and thousands of federal workers are furloughed, Obama said time was running out for a last-minute compromise.

Republicans in the House of Representatives are seeking to force Obama to delay or defund his signature health insurance reform law in return for funding government operations.

They are using a similar tactic as Obama also asks Congress for a lifting of the $US16.7 trillion ($NZ20 trillion) US debt ceiling. If no deal is reached, the United States may begin defaulting on its debts by the middle of October.


"One faction of one party in one house of Congress in one branch of government doesn't get to shut down the entire government just to refight the results of an election,'' Obama said this morning.

"Congress needs to keep our government open, needs to pay our bills on time, and never, ever threaten the full faith and credit of the United States of America.

"Time is running out. My hope and expectation is that in the 11th hour once again, that Congress will choose to do the right thing and that the House of Representatives in particular will choose the right thing.

"Unfortunately, right now, House Republicans continue to tie funding of the government to ideological demands like limiting a woman's access to contraception or delaying the Affordable Care Act, all to save face after making some impossible promises to the extreme right wing of their party.''

Obama also warned that the imminent shutdown would have real and dramatic economic consequences for thousands of Americans and said it was not fair that people who had dug out of the worst recession in decades were again facing economic uncertainty.



During the previous two shutdowns, for six days in November 1995 and 21 days from December that year into early 1996, some 800,000 federal employees were ordered to stay home, according to a congressional report.

Here is a snapshot of what is likely to occur in the event Congress cannot agree on a federal spending bill by Tuesday.

WHITE HOUSE and CONGRESS: Facilities will remain open, although both are likely to furlough some staff. The State Department too will temporarily furlough non-essential personnel. Some US lawmakers, like Congresswoman Tulsi Gabbard of Hawaii, have pledged to stand in solidarity with constituents and return their salaries to the Treasury or donate them to charity in case of a shutdown.

PENTAGON: Military personnel will remain on duty, although with possible delays in paycheck processing. More than half the Defense Department's 800,000 civilian employees are expected to be furloughed, and the Pentagon has warned of likely "hardships'' for many workers.

NATIONAL SECURITY: Such services will remain operational, including US border patrol and airport screening. Personnel who are deemed to "protect life and property,'' such as emergency responders, would stay on duty.

MEDICAL RESEARCH: The National Institutes of Health would not be allowed to begin new clinical trials or see new patients.

MUSEUMS and PARKS: Smithsonian museums and all 368 sites in the National Park Service system would close.

NASA: Operations that keep the International Space Station, currently home to six astronauts including two Americans, will continue, but most of the US space agency's 18,000 employees will stay home without pay.

ENVIRONMENTAL PROTECTION AGENCY: EPA would have virtually no one monitoring air and water quality or enforcing oil pollution regulations.

POSTAL SERVICE: Since the US Postal Service has its own independent sources of funding, it remains open.

SOCIAL SECURITY: Entitlement programs will continue albeit with hiccups. Social Security checks will be mailed, but the program's offices will close. Military veterans will receive their benefits, but disability claims will be backlogged. Veterans hospitals will remain open.

WASHINGTON: Congress holds exclusive jurisdiction over the capital. During the last shutdown, the city was the focus of embarrassment as it halted trash collection. Now, Mayor Vincent Gray says he will declare all city employees "essential personnel'' in event of a shutdown, and use a contingency cash reserve fund to pay wages.

ECONOMY: Senate Majority Leader Harry Reid has said that a temporary shutdown would "shatter our economy.'' That may be hyperbole, but the impact could be significant. According to Macroeconomic Advisers, the effect of a two-week shutdown on fourth-quarter GDP growth would be 0.3 percentage points.