What is happening?
The fiscal year (for accounting and taxing purposes) runs from September 30 to October 1. The sole job of the US Congress is to pass spending bills, including setting the budget at the beginning of each fiscal year. If a budget cannot be agreed on, the US government shuts down, and all non essential government workers are furloughed.
Why is this happening?
The US Congress consists of the House (which is mostly controlled by the Republicans) and the Senate (which is mostly controlled by the Democrats). All spending bills must be agreed on by both the Senate and the House. The House Republicans are calling for a new budget to defund or impede ObamaCare; the Senate Democrats are very against this type of budget.
What does this mean?
1. Non essential government workers (numbering around 800,000) are put on furlough, or unpaid leave
2. Although a shutdown is unlikely to cause an economic failure, the debt limit crisis could result in a catastrophe. On October 17, Congress must raise the debt ceiling or the US will default. The government would run out of money to pay its bills, which could cause another recession as confidence in the US economy would drastically fall.
Please visit these links for more information:
Debt Ceiling – http://www.cbsnews.com/8301-505123_162-57606253/debt-ceiling-understanding-whats-at-stake/
Detailed Explanation of Events – http://www.theguardian.com/world/2013/sep/30/us-shutdown-explainer-non-americans