* Weekend sessions of Congress set
* Senate bill would operate government for six
weeks
* Defiant House Republicans seek one-year
Obamacare delay
By Rachelle Younglai and Thomas Ferraro
WASHINGTON, Sept 27 (Reuters) - President
Barack Obama sternly warned the U.S. Congress
on Friday against a government shutdown on
Oct. 1 as lawmakers struggled to pass an
emergency spending bill that Republicans want
to use to defund Obama's healthcare reform law.
While there was still a chance of averting a
shutdown, time was running out as House of
Representatives Republicans fought with each
other over the next steps.
"Over the next three days, House Republicans will
have to decide whether to join the Senate and
keep the government open or shut it down
because they can't get their way on an issue that
has nothing to do with the deficit," Obama said in
a statement to reporters at the White House.
Earlier on Friday, the Senate, as expected, passed
a straight-forward emergency-funding measure to
keep the government running through Nov. 15.
But first, it stripped out Republican language to
end funding for the healthcare law known as
Obamacare.
The House could vote on that measure in an
unusual Saturday or Sunday session. But all
indications were that Republicans would tack on a
new measure to that bill, which likely would be
rejected by the Senate and make a shutdown all
the more likely.
Hours after Obama spoke, Representative Tom
Graves of Georgia, a conservative Republican, said
he and 61 of his colleagues would seek passage of
a one-year delay of Obamacare as part of an
emergency funding bill.
Michael Steel, a spokesman for House Speaker
John Boehner, had no comment on whether
Graves' amendment would be the path
Republicans would take this weekend. "We're
reviewing our options and will discuss them with
members tomorrow," he said.
Although some government functions like
national security would continue, a shutdown
could hit activities ranging from school lunch
programs for poor children and paying U.S.
troops to foreign embassy operations.
Before the Senate passed its bill to keep the lights
on in government buildings, Senate Majority
Leader Harry Reid, a Democrat, said the measure
would "send a message to radical Republicans"
that they should climb on board with a simple
extension of federal funding at current levels.
Taunting Boehner, Reid told reporters the Senate
bill would overwhelmingly pass the House "if the
speaker had the courage" to bring it up for a
vote.
But Boehner had some political realities to
consider. Representative Richard Hudson, a North
Carolina Republican, said: "I think it would be
devastating for the speaker's support" among
Republicans if he went ahead with a bill that
needed a lot of Democratic support to pass
because of Republican opposition.
Meanwhile, business groups, including the U.S.
Chamber of Commerce, urged Congress to
promptly pass the spending bill and raise the limit
on government borrowing.
Concern over fiscal negotiations in Washington
sent the dollar to a 7-1/2-month low and
pressured world equities on Friday.
The impasse has sent the cost of insuring against
a U.S. debt default to its highest since May.
A PARTIAL SHUTDOWN
A shutdown would likely result in up to 800,000
federal employees being furloughed. The most
visible sign to the public, if past shutdowns are a
guide, are museum closings in Washington that
outrage tourists and attract television cameras,
and possible delays in processing tax filings, for
example.
But the government does not grind to a halt.
Large swaths of "essential" activity continue,
including benefit checks and national security-
related operations. Government agencies were in
the process of determining which employees
would be considered essential and which not.
Obamacare would continue to be implemented,
beginning a period of open enrollment on
Tuesday for individuals to purchase insurance.
Various agencies on Friday began announcing
plans for next week in the event of a shutdown.
For example, the Labor Department said its flow
of employment statistics, which are closely
watched by financial markets, would be
disrupted.
The key 79-19 vote to end debate on the Senate
bill was a defeat for Tea Party-backed Republican
Senator Ted Cruz, who tried to tie up the Senate
all week with demands that government funds be
denied until Obama's healthcare law was put on
ice. Fewer than half of his fellow Republicans
supported him.
Cruz, speaking to reporters after the vote, urged
the House to continue fighting to scuttle
Obamacare, which he argues will hurt the U.S.
economy.
Indicative of lawmakers' desperation, many
mulled the possibility of passing a bill to keep the
government running for a very short period of
time to avert a shutdown and provide more time
to work out a longer-term deal.
Representative Shelley Moore Capito of West
Virginia, a senior House Republican, told Reuters:
"People are talking about a 10-day CR," a so-
called continuing resolution to fund the
government through Oct. 10.
That could put the subsequent temporary
funding bill on a similar timetable to a debt limit
increase that Congress must pass or risk a
government default on its loans.
MIDNIGHT MONDAY
As lawmakers stared down the midnight Monday
deadline when the current fiscal year ends - and
government funding along with it - Senate
officials worked feverishly to transmit the newly
passed spending bill to the House.
Earlier, Republican Senator John McCain blamed
members of his own party for the difficulties in
passing legislation to fund the government
beyond Monday. Congress also faces the hard
task of raising the limit on federal borrowing
authority, which Republicans are targeting for
controversial add-ons.
Without a debt limit increase by Oct. 17, Treasury
Secretary Jack Lew has warned, the United States
would have a difficult time paying creditors and
operating the government.
"We are dividing the Republican Party rather than
attacking Democrats. We are now launching
attacks against Republicans ... so it's very
dysfunctional," McCain said on the CBS program
"This Morning."
Other lawmakers also expressed frustration with
their fellow Republicans' demands to win on
Obamacare, even though the Supreme Court has
upheld most of the law.
"There's a lot of exasperation by those of us who
want to move the ball forward and in a rational
way," Capito said. "By rational, I mean trying to
achieve the achievable."
Tea Party conservatives' insistence on using these
two important fiscal bills to advance their small-
government agenda comes as a new Gallup Poll
shows the country's patience with them could be
wearing thin, even though there still are a
significant number of backers.
According to the poll, 22 percent of U.S. adults
think of themselves as supporters of the
movement, down 10 points from the apex of Tea
Party popularity in 2010, when they influenced
enough elections to return House control to
Republicans.
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