The White House budget director has ordered federal agencies to begin closing down after the Senate and the House of Representatives failed to reach an agreement on a budget plan to avert a government shutdown.
"Agencies should now execute plans for an orderly shutdown due to the absence of appropriations," Sylvia Mathews Burwell, director Of the White House Office of Management and Budget said in a memo.
The order was issued 10 minutes before the US government officially ran out of money.
"We urge Congress to act quickly to pass a Continuing Resolution to provide a short-term bridge that ensures sufficient time to pass a budget for the remainder of the fiscal year, and to restore the operation of critical public services and programs that will be impacted by a lapse in appropriations," Burwell said.
A midnight deadline passed without agreement between the two rival groups in Congress despite an 11th-hour appeal by President Barack Obama.
It is the US government’s first partial shutdown in 17 years.
More than 700,000 government workers now face unpaid leave with no guarantee of back pay once the government reopens.
The Republican-controlled House insisted on delaying Obama’s Affordable Care Act, known as Obamacare, as a condition for passing the budget plan. But President Obama and Democratic leaders said they wouldn’t negotiate on healthcare reforms.
The Senate is set to meet again on Tuesday morning, Democratic Senate Majority Leader Harry Reid said.
On Monday afternoon, the Senate voted 54-46 against a House bill that would have funded the government only if Obamacare was delayed for a year.
Analysts have warned that the US economy will seriously be damaged if the shutdown last for more than a few days.
The US stocks dropped sharply on Monday amid fears of political deadlock.