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President Obama cancels Asia trip amid government shutdown

The US budgetary impasse and government shutdown has prompted President Barack Obama to cancel trips to Indonesia and Brunei. The White House said Obama would stay home to press rival Republicans to reopen government.

Secretary of State John Kerry would lead US delegations to a summit in Bali, Indonesia and Brunei, said the White House on Friday. Already, Obama had canceled other planned stopovers in Malaysia and the Philippines.

Early on Friday, Democrats and Republicans remained no closer to resolving a budget feud that has partly shut down federal government services.

The shutdown, in place since Tuesday, was clearly leaving its mark with 800,000 employees or a third of the federal workforce told to stay home.

The National Transportation Safety Board was unable to send investigators to Tennessee to probe a deadly church bus crash that killed eight people. The Labor Department said it would not release a key September jobs report on Friday.

Officials also warned the dispute could grow to encompass legislation needed by October 17 to raise the US debt limit.

The Democratic-led Senate on Thursday turned back repeated Republican piecemeal efforts to pass budgetary measures for popular federal agencies - such as national parks - while defunding or delaying Obama's health care law.

IMF warning

International Monetary Fund chief Christine Lagarde warned the US not to allow the standoff to get that far.

"The government shutdown is bad enough, but failure to raise the debt ceiling would be far worse, and could very seriously damage not only the US economy, but the entire global economy," she said.

Visiting Maryland near Washington on Thursday, Obama lambasted Republican House Speaker John Boehner, who had complained on Wednesday that the president would not negotiate with him.

"Take a vote, stop this farce and end this shutdown right now," Obama said.

"Speaker John Boehner won't even let the bill get a yes or no vote, because he doesn't want to anger the extremists in his party," Obama added.

Boehner replied that the shutdown could end if the president would negotiate to fix "flaws in "Obamacare," the law designed to extend insurance to millions of Americans who previously did not have coverage.

It is a centerpiece of Obama's political legacy and is reviled by Tea Party conservatives within Republican ranks.

"We're trying to see if we can get the Senate and the president to start talking to us, on anything. They're just not talking to us," said Republican Representative Mario Diaz-Balart of Florida.

Stock markets, dollar fall

Major stock markets fell on Thursday, while the dollar dropped to an eight-month low over concern the budget standoff would merge with the coming fight over raising the US borrowing limit.

The US Treasury warned on Thursday of a "catastrophic" impact if a debt default occurred, saying a failure to pay the nation's bills could punish American families and businesses with a worse recession than the 2007-2009 downturn.

Despite the shutdown, people classified as essential employees - such as air traffic controllers, Border Patrol agents and most food inspectors - continued to work.

ipj/jm (Reuters, AFP, AP)