The Republicans and Democrats failed to strike a deal on spending and budget due to differences over 'Obamacare', the signature healthcare programme of President Barack Obama.
About 800,000 federal workers in the US were told to stay at home while national parks, museums, government buildings and services shutdown as a result of the deadlock in the Congress.
"Congress has not fulfilled its responsibility. It has failed to pass a budget and, as a result, much of our government must now shut down until Congress funds it again," Obama said in a video message to the armed services shortly after the shutdown came into effect.
"The threats to our national security have not changed, and we need you to be ready for any contingency. Ongoing military operations, like our efforts in Afghanistan, will continue. If you're serving in harm's way, we're going to make sure you have what you need to succeed in your missions," he said.
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Later on, the Democratic party-led Senate voted to reject the latest House Republican effort to negotiate on the budget.
The party-line vote was 54-46. The Senate turned down the House request to name negotiators to a conference to resolve the deadlock.
Majority Leader Harry Reid said he would not negotiate as long as Republicans were holding up the spending bill to keep the government operating.
Opponents say it will hurt employers and amounts to overreach by the federal government. Some have also criticised the medical device tax that's part of the law, saying that by imposing such a tax, it is basically sending jobs overseas.