Senate set to defeat Obamacare delay as U.S. government shutdown looms

By David Lawder and Susan Heavey

WASHINGTON (Reuters) - With just hours to go before a midnight deadline to avert a federal government shutdown, the Democratic-controlled U.S. Senate on Monday was poised to reject a funding measure that would delay reforms promised in the 2010 healthcare overhaul.

Senior Senate Democratic aides said the chamber would take a simple majority vote shortly after 2 p.m. (1800 GMT) that would strip Republican amendments and send a "clean" funding bill back to the House of Representatives.

The move tosses a political hot potato back to Republican House Speaker John Boehner, leaving him a choice of whether to accept it and keep government agencies funded or try another move to rein in President Barack Obama's signature healthcare law.

The latter action would all but assure at least a brief shutdown, because the Senate would likely run out of time to respond before the October 1 start of the new fiscal year.

Failure to reach an agreement to extend funding would force federal agencies and programs to close or partially close for the first time in 17 years.

Republicans are not backing down, Boehner said on Monday morning. "The House has done its work," he said on the House floor, referring to the bill passed by the House on Saturday that would continue funding the government while delaying the health law known as Obamacare for one year and repealing a tax on medical devices. He urged the Senate to pass this bill.

There were no sign of negotiations after a quiet Sunday marked by the two parties trying to pin blame on each other for a looming shutdown.

The recriminations continued early Monday, as Republicans accused Obama of ignoring their pleas for negotiations.

"This president hasn't been involved at all with the leadership or with the Congress," Representative Matt Salmon, an Arizona Republican, told MNSBC's "Morning Joe" program, adding that Obama has not contacted Boehner in more than a week.

But he said Republicans would not give up their quest to thwart the implementation of Obamacare, a program aimed at providing healthcare coverage to millions of uninsured Americans. Republicans say the launch on Tuesday of new online government health insurance exchanges will cause premiums to rise and deter companies from hiring new workers.

Salmon, who was in Congress during the last shutdown from late 1995 to early 1996, said Republicans do not want to see a shutdown but would keep fighting against Obamacare with another proposal. "We should go back at them," he said.

DEMOCRATIC SENATOR CONDEMNS 'EXTORTION'

Democratic Senator Charles Schumer of New York said he was still holding out some hope that the House Republicans "would come to their senses" and vote to keep the government open.

"It is extortion," Schumer, speaking on "Morning Joe," said of Republicans' strategy. "It's holding the good of the country - the economy, middle-class people at risk."

Early on Sunday, House Republicans passed measures to attach the Obamacare delay and the repeal of the medical device tax to the stop-gap spending bill that would keep government agencies open until November 15. In a sign that a shutdown may look increasingly inevitable, the House also unanimously passed a measure to keep paying U.S. soldiers in the event of a shutdown.

More people will blame congressional Republicans than Obama if the U.S. government shuts down this week and most want a budget deal to avoid disruption to federal funding and services, a poll released on Monday showed.

Forty-six percent said that if government agencies and programs start closing on Tuesday, they would fault Republicans in Congress while 36 percent said they would blame Obama, the CNN survey found. Thirteen percent said both would be at fault.

About 60 percent of the 803 U.S. adults polled said they want lawmakers to pass a budget agreement to avoid the shutdown, according to the telephone survey conducted over the weekend. (Additional reporting by Richard Cowan and Caren Bohan; Editing by Karey Van Hall, Doina Chiacu and Mohammad Zargham)