US budget shutdown entirely avoidable: Obama

President Barack Obama said Monday that a potential US government shutdown was "entirely avoidable" as only a few hours remained to avert it.

Obama criticised Republicans for trying to refight the last election as they seek to link the budget to delaying his health care law. If no agreement is reached by midnight (04.00 GMT), the government will close all non-essential federal services, BBC reported.

A shutdown would have "a very real economic impact on real people, right away," Obama said Monday afternoon, as just under seven hours remained until the deadline, adding it would "throw a wrench" into the US recovery.

"The idea of putting America's hard-earned progress at risk is the height of irresponsibility, and it does not have to happen."

One of the key points of contention in the political stalemate has been President Obama's healthcare law, popularly known as Obamacare. Republicans in the House of Representatives, the lower house of US congress, - and their allies in the Senate, the upper house, - have demanded the law be repealed or stripped of funding as a condition for continuing to fund the government.

Over 700,000 federal government workers could be sent home on unpaid leave, with no guarantee of back pay once the deadlock was over.

Major portions of the law, which passed in 2010 and has been validated by the US Supreme Court, are due to take effect Tuesday regardless of whether there is a shutdown.

While over 700,000 federal employees are expected to be sent home on unpaid leave or furloughs; "what will not be furloughed is the bills they have to pay," Obama said.

Obama and his fellow Democrats in the US Senate have vowed to reject any House bill that touches the health care law. "Does anybody truly believe we won't have this fight again in a couple more months?" Obama said, explaining why he and his congressional allies would not negotiate the law.

Earlier, the Democratic-led Senate voted 54-46 against a bill from the Republican-led House of Representatives to fund the government only if Obama's healthcare law was delayed for a year.

The shutdown would be the first in the US in 17 years.