WASHINGTON (MarketWatch) — The U.S. government began a partial shutdown early Tuesday morning, after 11th-hour moves by lawmakers over the U.S. budget and President Barack Obama’s health-care law left Congress unable to agree on funding for the fiscal year that began just after midnight.

The shutdown is the first since 1996. In the absence of a spending bill for the just-begun fiscal year, thousands of government workers will be furloughed, national parks will be shuttered and the government’s handling of certain applications and cases will stop. Other services, including the issuing of Social Security checks and the U.S. Mail, will continue.

House Speaker John Boehner Getty Images

What happens next — including the length of the shutdown — is unclear. Lawmakers are expected to continue negotiating a funding measure later Tuesday.

Late Monday night, House Republican leaders sought a conference committee with Senate Democrats on a short-term funding measure. Democrats kept up demands for a new short-term budget bill with no strings attached.

“We will not go to conference with a gun to our head,” said Senate Majority Leader Harry Reid, a Nevada Democrat.

The budget impasse came amid a deep divide over Obama’s health-care law, with Republicans trying multiple times to delay the measure. The shutdown will not delay a key feature of the new health law; enrollment in marketplaces allowing individuals to buy health-insurance policies begins Tuesday.

Obama spoke with congressional leaders on Monday night but they weren’t able to bridge the funding divide. In remarks to reporters, Obama said it was the job of Congress to fund the government.

“You don’t extract a ransom for doing your job,” Obama said. He said a shutdown would have “a very real economic impact on real people, right away.”

The threat of a shutdown spooked Wall Street on Monday. The Dow Jones Industrial Average, S&P 500 index and Nasdaq Composite all fell. See Market Snapshot.

House Republicans late Monday night passed a bill that would fund the government through Dec. 15, while also delaying for one year the health law’s mandate for individuals to buy insurance or pay a fine. The Senate quickly rejected the House’s budget bill along party lines.

“This is not about me,” House Speaker John Boehner said Monday night. “And it’s not about Republicans here in Congress. It’s about fairness for the American people.”

The White House last summer delayed the law’s mandate for employers to provide coverage, or pay a fine. Republicans charge that the law hampers job creation and threatens the economic recovery.

Political risks from the shutdown are high, especially for Republicans. A CNN poll found that 46% of Americans would blame the GOP for a shutdown, and 36% would blame Obama.

Business groups and economists have warned of the effects of a shutdown. Macroeconomic Advisers estimates a 0.3% drag on gross domestic product in the fourth quarter from a two-week shutdown beginning Oct. 1. Read about ripple effects of shutdown on Capitol Report blog.

The brawl over funding the government for the fiscal 2014 year comes just ahead of another key deadline, over raising the U.S. debt ceiling. U.S. Treasury Secretary Jacob Lew says that emergency steps to keep the government from hitting the debt ceiling will run out on Oct. 17.

House Republicans have pledged to use the debt ceiling debate to attack Obama’s health law. On Monday, Obama said the GOP was wasting its time.

“The Affordable Care Act is moving forward. That funding is already in place. You can’t shut it down,” Obama said. Read more about the health law on MarketWatch’s Health Exchange blog.