Obama admits 'there are no winners here' after signing deal to end shutdown [Government employees return to work after 16 days as president warns Washington against repeat of political brinkmanship] By Dan Roberts

Obama said: 'Nothing has done more damage to American credibility than the spectacle we have seen in the last couple of weeks.' Photo: Alex Wong/Getty Images


Thousands of federal employees began returning to work on Thursday, as the end of a 16-day US government shutdown raised faint hopes of easing the political deadlock in Washington.

Hours after President Barack Obama signed a congressional budget agreement into law, the gradual return to normality contrasted with a visibly shaken political establishment and residual anger over the standoff.

In a speech at the White House, Obama said one of the few positive outcomes of the crisis had been to make people appreciate the multitude of government functions.

"The American people got an idea all the ways large and small that make a difference in people's lives," he said. "We hear all the time that government is the problem but it turms out we really need it in lots of different ways." But Obama was also visibly angry, telling Republicans: "You don't like a president? Go out and win an election."

He said the shutdown had undermined the economy and damaged the reputation of US political system internationally. "There are no winners here. These last few weeks have inflicted completely unnecessary damage on our economy. The American people are completely fed up of Washington. Probably nothing has done more damage to American credibility in the world than the spectacle we have seen in the last couple of weeks."

IMF managing director Christine Lagarde welcomed the deal but said the shaky American economy needs more stable long-term finances. "It will be essential to reduce uncertainty surrounding the conduct of fiscal policy by raising the debt limit in a more durable manner," Lagarde said in a statement.

The financial services company Standard & Poor's estimated the shutdown had cost the US economy $24bn.

Obama expressed a hope that the decision by Republican House speaker John Boehner to allow moderates in his party to vote withDemocrats to end the shutdown may herald a new era of bi-partisan co-operation in the House of Representatives.

In particular, the administration is hoping that an agreement in Congress to set up a formal "conference" to negotiate a longer term financial deal may allow a budget bill to be passed by the end of the year as well as separate legislation on immigration and a farm bill.

This may prove wishful thinking given the continued rancour and recriminations among Republicans, but there were tententive signs of progress on Thursday morning as House fiscal hawk Paul Ryan met with Democratic senator Patty Murray to discuss how the new budget conference would work.

Ryan, who was one of the few House leaders to vote against Wednesday's compromise, said they had a very good conversation and are committed to finding ways to enact "smart deficit reduction."

More than 87 Republicans in the House and 27 in the Senate (a majority of the caucus in the upper chamber) voted for the deal that ended the shutdown and the threat to withhold borrowing authority.

A similar number of House members are thought to be in favour of immigration reform, which would be the next big test of any lingering bipartisan spirit, but Boehner will be reluctant to again test the unofficial"Hastert rule", which advises party leaders against bringing forward legislation which does not have majority support among their own members.People arrive at the Smithsonian national air and space museum. Photograph: Joshua Roberts/Reuters

As the office day started, there was a trickle rather than a flood of federal workers returning to the maze of government buildings near Federal Center metro station in downtown Washington.

The area, scene of a mass exodus on October 1st when thousands were sent home at the start of government shutdown, was still much quieter than normal and many of those who returning for the first time had been informed by watching news reports rather than receiving direct instructions.

"There was no economic rationale for any of this," vice president Joe Biden said as he greeted workers returning to the Environmental Protection Agency with hugs, handshakes and muffins. "I hope everybody walks away with a lesson that this is unnecessary and I hope we can regain the trust of the American people."

Some members of Congress were already bracing for another battle. "All this does is delay this fight four months," Republican Congressman Mo Brooks said. "We need to get to the underlying cause of the problem, which is our out-of-control spending and deficits, and fix it before it's too late and we go down the toilet to bankruptcy because that's where America is headed."

Some polls showed a steep decline in public approval for Republicans. Senator John McCain, who has been vocal in his criticism of more hardline members of his party, said voters were clearly exasperated with how both sides had dealt with the crisis. "Hopefully, the lesson is to stop this foolish childishness," McCain said Thursday on CNN.