The US government has begun a partial shutdown after the two houses of Congress failed to agree a new budget.
The Republican-led House of Representatives insisted on delaying President Barack Obama's healthcare reform - dubbed Obamacare - as a condition for passing a bill.
More than 700,000 federal employees face unpaid leave with no guarantee of back pay once the deadlock is over.
It is the first shutdown in 17 years and the dollar fell early on Tuesday.
Goldman Sachs estimates a three-week shutdown could shave as much as 0.9% from US GDP this quarter.
On Tuesday, Mr Obama blamed the House of Representatives for the stalemate and said he would "keep working to get Congress to reopen the government [and] restart vital services".
"This shutdown was completely preventable. It should not have happened," he wrote in aletter to federal government employees.
"And the House of Representatives can end it as soon as it follows the Senate's lead, and funds your work in the United States Government without trying to attach highly controversial and partisan measures in the process."
On Monday, House Speaker John Boehner told reporters he hoped the Senate would agree to a committee between the two chambers known as a conference "so we can resolve this for the American people".
"The House has voted to keep the government open but we also want basic fairness for all Americans under Obamacare," he said.
But on Tuesday morning, the Senate voted 54-46 to reject the request for formal negotiations to end the impasse.