WRAPUP 6-U.S. gov't heads toward shutdown, Senate rebuffs House talks

Reuters

(Corrects lawmaker's name in 10th paragraph to Steny Hoyer)

* Senate's Reid says House offer "a gun to our head"

* House Republicans offered conference on temporary bill

* Up to a million federal workers face furlough

By Thomas Ferraro and Richard Cowan

WASHINGTON, Sept 30 (Reuters) - The U.S. government washeaded toward a major shutdown over Republican efforts to haltPresident Barack Obama's healthcare reforms using a temporaryspending bill as last minute maneuvers failed to resolve deepdifferences between Democrats and Republicans.

Senate Majority Leader Harry Reid called the HouseRepublican offer of a panel to work out a deal on an emergencyspending bill negotiation "with a gun to our head."

Reid instead called on the House to pass a Senate-approvedmeasure that would keep the government funded through Nov. 15.

With so little time remaining before a midnight (0400GMT)deadline, a shutdown appeared inevitable. It would leavesome essential functions like national security intact butsharply cut many regulatory agencies, furlough up to a millionfederal workers.

Earlier on Monday, competing spending measures flew back andforth between the Republican-controlled House of Representativesand Democratic-led Senate with increasing rapidity and withoutany sign of compromise.

The House repeatedly insisted that the measure totemporarily fund the government must include a delay ofObamacare, and the Senate kept stripping the delay out.

An anticipated revolt by moderate House Republicans fizzledearlier on Monday after House Speaker John Boehner made personalappeals to many of them to back him on a key procedural vote,said Republican Representative Peter King of New York.

"John said, 'This is going to work out. Trust me,'" saidKing, one of only a handful of at least two dozen HouseRepublican moderates who rejected the appeal and voted "no."

Boehner prevailed on the procedural vote 225-204.

After Boehner made his personal appeal, House DemocraticWhip Steny Hoyer called on him to permit a vote on a simpleextension of federal funding of the government without anyObamacare add-on.

"I dare you to do that," Hoyer roared, confident such ameasure would win bipartisan approval. "Let democracy work."

"WRENCH INTO THE GEARS"

On Monday afternoon, Obama appeared resigned to a shutdown,stepping into the White House press room to reiterate that theshutdown would be the fault of the "extreme right wing" of theRepublican Party, referring to the conservative Tea Party.

He also reassured the public that while poor people andseniors, among others, would continue to receive benefit checksin the event of a shutdown, many other functions of governmentwould grind to a halt, throwing "a wrench into the gears of oureconomy."

And he taunted Republicans about Obamacare, a program aimedat providing healthcare coverage to millions of uninsuredAmericans. It "takes effect tomorrow no matter what Congressdecides to do today ... you can't shut it down."

Republicans say the launch on Tuesday of new onlinegovernment health insurance exchanges will cause premiums torise and deter companies from hiring new workers.

The White House later said Obama placed calls to toplawmakers, continuing to press the Republican leadership for sixweeks of government funding, free of any "ideological riders."

Obama also signed a measure that would ensure troops getpaid in the event of a shutdown. The bill was passed by theHouse on the weekend and the Senate on Monday.

Americans are split over whether funding for Obama'ssignature healthcare law should be linked to measures that payfor U.S. government operations, but more will blame Republicansif the government has to shut down on Tuesday, according to anew Reuters/ Ipsos poll.

The duration of the "funding gap," the bureaucratic termfor a partial government shutdown, would depend on whenlawmakers finally approve a funding bill.

Some functions deemed essential, such as U.S. Department ofAgriculture meat inspections, would continue. Other agencies,like the Environmental Protection Agency, will furlough most oftheir workers.

A shutdown would continue until Congress resolves itsdifferences. That could be a matter of days, or weeks.

The standoff does not bode well for the next politicalbattle, a far-more consequential bill to raise the federalgovernment's borrowing authority. Failure to raise the $16.7trillion debt ceiling by mid-October would force the UnitedStates to default on some payment obligations - an event thatcould cripple its economy and send shockwaves around the globe.

(Additional reporting by Richard Cowan, Caren Bohan, Kim Dixonand Gabriel Debenedetti in Washington and Ryan Vlastica in NewYork; Editing by Tim Dobbyn)

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