Congress is fighting over how to authorise funding for the federal government beyond September. This used to be a fairly routine stage in the budget process, but has been hijacked by House Republicans, who are using the opportunity to make one last attempt to block Obamacare, the president's initiative to extend health insurance to those without cover.
Democrats in the Senate are refusing to pass any so-called "continuing resolution" if it weakens Obamacare, making a government shutdown increasingly likely.
What's really going on?
A battle for the soul of the Republican party is waging between conservatives with presidential ambitions or long-term ideological goals, and more moderate lawmakers who are worried about losing control of the House in the 2014 midterms.
Speaker John Boehner was initially reluctant to link Obamacare to the continuing resolution because he feared the inevitable shutdown would be blamed on Republicans and hurt their electoral chances much as it did to his predecessor Newt Gringrich after the last shutdown in the 1990s. However, an influential group of Tea Party radicals in the House has teamed up with senator Ted Cruz to force Boehner into a more confrontational strategy.
Who's to blame for this?
Boehner's weakness as leader of the House caucus is a big part of the problem. He struck a last-minute deal with vice-president Joe Biden to avert the last budget standoff, dubbed the fiscal cliff, in January, but this angered many on the right of his party, exacerbating rather than defusing the simmering tension.
He has little support from majority leader Eric Cantor, who is thought to be angling for his job, and Republican whip Kevin McCarthy, who is close to the Tea Party. Nevertheless, the majority of House Republicans were not previously thought to be so rabidly anti-government, and Boehner has failed to use their numerical advantage to further his more cautious instincts.
Other party heavyweights such as Cruz, Paul Ryan, Marco Rubio and Rand Paul are willing to let the Tea Party prevail because they need the right wing on their side to win a 2016 presidential primary. Senate majority leader Harry Reid is not without some blame either: urging President Obama against any talks at all with Republicans, who the Democrats compare to "terrorists".
Congress has been at loggerheads over the federal budget ever since Democrats lost control of the House in 2010. As well as the fiscal cliff drama that played out over New Year, both parties narrowly averted a government shutdown in 2011 by striking a last-minute deal to cut spending.
This time, however, their differences may be harder to resolve because so much bad blood has already been spilled. Politically, Obama has little to lose from severing communications with congressional Republicans, because they are already blocking the two other things that matter to him – gun control and immigration – and is therefore even more reluctant to give up his only other big domestic achievement by delaying Obamacare.
But this lame duck status only encourages presidential hopefuls in both parties to focus more on jostling for longer-term advantage. The coincidence of this lapse in existing spending authorisation with the start of Obamacare's insurance exchanges and the forthcoming breach of government debt limits in two weeks may have led to a perfect storm.
Does it matter?
Government shutdowns have been survived before. In the 1970s they were commonplace – at least, until a legal ruling that forced non-essential workers to stay at home rather than work for IOUs. The second of Bill Clinton's standoffs with Newt Gringrich lasted 21 days over New Year 1995-6.
This time, however, the US economy is in much weaker shape, with a fragile recovery seen as vulnerable to the dip in consumer confidence that a protracted shutdown would probably bring. More worryingly, the debt ceiling breach expected on October 17 presents an incentive for diehards on both sides to keep fighting their corner as long as possible.
If a shutdown is not resolved within a week or so, the two issues are likely to be conflated into one giant standoff that threatens not just federal workers but the world economy.
How will it end?
A slightly more optimistic scenario is that Boehner succeeds in using the upcoming debt fight as a way to persuade his hardliners to let the continuing resolution pass and postpone their Obamacare fight until next month. This would only buy time, but would at least bring the shutdown to a swift conclusion.
The chances of more lasting resolution, or "grand bargain", as it optimistically became known during the fiscal cliff drama, look close to zero, with the sides where they are at present. The best hope for many Democrats is that Republicans receive so much public opprobrium that they lose the 2014 midterms or change tack to avoid that happening.
Conservative Republicans would be happy to see Obama forced to cede as much power as possible over domestic policy and are likely to carry on focusing on their core supporters, perhaps until after the 2016 primaries. And Speaker Boehner may be happy if he can strike a deal that lets him hang on to his job for another few weeks.
(c) 2013 Guardian Newspapers Limited.
Original headline: Government shutdown: what's really going on – and who's to blame?
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