Pay deal but standoff goes on

The partial shutdown of the US government entered its sixth day with no signs of a breakthrough as the House of Representatives passed a bill on Saturday to eventually reimburse laid-off federal workers for lost pay.

The measure, which was passed 407-0, was part of an effort to "ease the pain" of the first shutdown since 1996, said House Majority Leader Eric Cantor, of Virginia. He and fellow Republican leaders called on President Barack Obama and Senate Democrats to negotiate on a spending bill.

"He's here this weekend, we are here this weekend," Representative Kevin McCarthy, of California, the No. 3 Republican in the House, said. "This can all end."

The government shutdown has sent on leave about 800,000 federal employees and is becoming a prolonged impasse that is merging with the debate over raising the US debt ceiling.

The US Defence Department said it would call back most of the 400,000 laid-off workers. Defence Secretary Chuck Hagel said legislation signed by Mr Obama, which ensures service members are paid on time, allowed the military to call back civilian employees. About half of all federal employees sent home work for the Pentagon.

Senate Majority Leader Harry Reid said he would determine how to handle the House retroactive pay measure when the Senate received it. On Saturday he continued to blame Republicans for the government shutdown.

If the shutdown lasted three or four weeks, the costs to the economy could rival that of hurricane Sandy, he said.

He also likened the House's pay plan to an "Alice in Wonderland" trick, saying Republicans spent the past two years seeking to undermine federal employees and their benefits.

"It's really cruel to tell workers they'll get their back pay once the government opens and then refuse to open the government," Senator Reid said, calling on the House to pass a spending bill without conditions.

The US budget deficit in June was 4.3 per cent of gross domestic product, down from 10.1 per cent in February 2010 and the narrowest since November 2008, when Mr Obama was first elected, according to data compiled by Bloomberg.

Republicans' most recent proposal for ending the shutdown would postpone for one year the mandate for individuals to buy health insurance, mirroring the delay the administration granted to employers. It also would remove employer contributions towards health insurance for members of Congress, their staff and political appointees.

"When we have a crisis like we're in ... the American people expect their leaders to sit down and try to resolve their differences," House Speaker John Boehner said on Friday, insisting that Democrats make concessions on the 2010 Affordable Care Act.

Mr Obama says Mr Boehner should split with the majority of House Republicans and vote on a short-term spending bill without policy conditions. "If Speaker Boehner will simply allow a vote to take place, we can end this shutdown," he said. "And a whole bunch of families ... will have the certainty that paychecks will be coming." Bloomberg