US spy chief: Shutdown 'damaging'

Senior US intelligence officials have warned the shutdown of the US government "seriously damages" spy agencies' ability to protect the US.

Director of National Intelligence James Clapper told a Senate panel that an estimated 70% of intelligence workers had been placed on unpaid leave.

Also, the head of the US electronic spy agency said morale had been devastated.

The US government closed non-essential operations on Tuesday after Congress failed to reach a new budget deal.

Foreign spies' 'dreamland'

Mr Clapper appeared before a Senate judiciary committee hearing on Wednesday, warning lawmakers the damage to US intelligence capabilities caused by a shutdown would be "insidious".

"This is not just a Beltway issue," he said, referring to the Washington DC area. "This affects our global capability to support the military, to support diplomacy, and to support our policymakers."

Mr Clapper also warned that foregoing paying employees during the shutdown could cause them financial hardship, making them inviting targets for foreign spies.

"This is a dreamland for foreign intelligence services," he said.

Gen Keith Alexander, director of the National Security Agency, said the electronic spying agency had placed thousands of mathematicians and computer scientists on unpaid leave.

"Our nation needs people like this," he said. "And the way we treat them is to tell them, 'you need to go home because we can't afford to pay you, we can't make a deal here.'"

The government shutdown has left more than 700,000 employees on unpaid leave, and closed national parks, tourist sites, government websites, office buildings and more.

It came after weeks of wrangling between Democrats in the White House and Senate and the Republicans who control the US House of Representatives.

House Republicans have demanded repeal, defunding or delay of a healthcare law passed in 2010 by the Democrats as a condition for continuing to fund the government. Mr Obama and the Democrats have refused, leading to the current morass.

The spy chiefs' remarks came after the White House announced Mr Obama would cut short a planned four-nation tour of Asia next week.

Mr Obama will attend regional summits in Indonesia and Brunei, but skip Malaysia and the Philippines due to the government shutdown.

'Consequence of shutdown'

He had been scheduled to begin his Asian trip on Saturday, heading to Bali for an Asia-Pacific Economic Co-operation (Apec) summit and to Brunei for the East Asia summit before travelling on to Malaysia and the Philippines.

On Wednesday the White House said Mr Obama looked forward to visiting those two nations "later in his term".

National Security Council spokeswoman Caitlin Hayden called the trip cancellation "another consequence of the House Republicans forcing a shutdown of the government".

"This completely avoidable shutdown is setting back our ability to promote US exports and advance US leadership in the largest emerging region in the world," she said.

Earlier, the office of Malaysian Prime Minister Najib Razak said Mr Obama had called him to inform him that Secretary of State John Kerry would address an entrepreneurship conference in Kuala Lumpur on 11 October in his place.

"I empathise and understand," Mr Najib told the media. "If I were in his shoes, I would do the same."

'A lot of anxiety'

The US government ceased operations deemed non-essential at midnight on Tuesday, when the previous budget expired.

National parks and Washington's Smithsonian museums are closed, pension and veterans' benefit cheques will be delayed, and visa and passport applications will go unprocessed.

However, members of the military will be paid.

Treasury department employee Peter Gamba told the BBC he was worried by the turn of events.

"For whatever reason I cannot fathom, you're asking me to again give up my pay and give up service to the American public," he said.

"It's a nightmare for me financially, it causes me a lot of anxiety and stress and I don't sleep well at night."

President Obama has blamed conservative Republicans in the House of Representatives for the government shutdown, saying "one faction of one party" was responsible because "they didn't like one law".

"They've shut down the government over an ideological crusade to deny affordable health insurance to millions of Americans," Mr Obama said.

The White House has also rejected a Republican offer to fund only a few portions of the government - national parks, veterans' programmes and the budget of the District of Columbia - until a broader deal can be struck.

'Indefensible'

The Republicans have called for more negotiations.

Republican House Speaker John Boehner has accepted an invitation to a meeting at the White House, currently scheduled for 17:30 local time (21:30 GMT).

"We're pleased the president finally recognises that his refusal to negotiate is indefensible," said his spokesman Brendan Buck.

"It's unclear why we'd be having this meeting if it's not meant to be a start to serious talks between the two parties."

Senate Republican leader Mitch McConnell, as well as Democratic Senate Majority Leader Harry Reid and House Minority Leader Nancy Pelosi, are also expected to attend.

Analysts say Mr Boehner could end the showdown by allowing the House to vote on a "clean" budget bill that does not alter the health law, because that could pass with a coalition of Democrats and moderate Republicans.

But doing so would risk his standing with the most conservative elements of his caucus, analysts say.

An opinion poll released on Tuesday suggested the American public disagreed with the Republican strategy.

An estimated 72% of voters opposed Congress shutting down the federal government in order to block the health law, according a poll by Quinnipiac University.

The healthcare law passed in 2010, was subsequently validated by the US Supreme Court, and was a major issue in the 2012 presidential election.

The next key fiscal deadline in the US is 17 October, when the government reaches the limit at which it can borrow money to pay its bills, the so-called debt ceiling.

House Republicans have demanded a series of policy concessions - including on the health law and on financial and environmental regulations - in exchange for raising the debt ceiling.

President Obama is due to meet the heads of some of Wall Street's biggest banks - including JPMorgan Chase, Goldman Sachs and Bank of America - to discuss the debt ceiling and other economic issues.

The bankers are members of the Financial Services Forum, a lobbying group which has, along with 250 other businesses, sent a letter to Congress urging it to raise the debt ceiling.