WRAPUP 1-U.S. House Republican plan may avoid government shutdown

WASHINGTON, Sept 18 Wed Sep 18, 2013 1:10pm EDT

WASHINGTON, Sept 18 (Reuters) - Republicans in the U.S. House of Representatives on Wednesday set in motion a plan that is expected to avert a federal government shutdown on Oct. 1, but bring another battle over President Barack Obama's healthcare program.

The plan will also force another fight over avoiding a first-ever government default on its debt. The government's authority to borrow more money will run out around mid-October unless Congress increases the debt ceiling.

This year, as in past fiscal showdowns, nothing is certain about the outcome. Republicans are deeply divided over their tactical approach and Obama's relationship with Democrats in Congress is under stress from recent disagreements over Syria and Obama's choice to head the Federal Reserve.

For the moment, however the carefully scripted legislative dance, goes like this:

A bill to fund the government temporarily, and thus avoid a shutdown, may move through the Republican-controlled House this week. House Speaker John Boehner is trying to round up the votes among his fellow Republicans to pass a funding bill that will last through Dec. 15. It would keep in place tough spending caps imposed by the across-the-board cuts known as the "sequester."

Boehner's task will be aided by language embedded in the bill and demanded by conservatives that would deny money to implement Obama's healthcare law, known as Obamacare, which next month begins signing up uninsured people for subsidized insurance.

The Democratic-held Senate is expected to take the House-passed bill, strip out the troublesome Obamacare provision and then send it back to the House for final passage.

To do this, Senate Majority Leader Harry Reid will have to find at least six Republicans to cooperate with the overall plan. Though they are in lock-step opposition to Obamacare, some Senate Republicans consider it futile and politically suicidal to link efforts to kill it to the government funding or debt ceiling measures.

If Reid succeeds, and if the right combination of House Republicans and Democrats join forces to pass the retooled Senate bill, Congress will have side-stepped government shutdowns like the ones that roiled Washington in late 1995 and early 1996.

Then, House Republicans will queue up the second battle over raising the $16.7 trillion limit on government borrowing. Past battles over the debt ceiling have rattled markets far more than threats of government shutdowns.

Again, Republicans aim to attach to the debt measure a provision to delay or kill Obamacare, along with other contentious ideas, such as approving the Keystone oil pipeline that would run from Canada through the middle of the United States to the Gulf of Mexico. The Obama administration is weighing environmental concerns over that long-delayed project.

Both steps are drawing heavy opposition from Democrats.

At a brief press conference following a closed-door meeting of House Republicans, Boehner warned that this 2013 fight over the debt limit would be "no different" from his party's efforts in 2011 to link a debt limit hike to deficit-reduction efforts.

That 2011 battle brought so much uncertainty over the U.S. government's ability to manage its fiscal affairs that it resulted in the first-ever downgrade of Washington's gold-standard credit rating.

Boehner told his fellow Republicans that a House vote on the debt limit could come as early as next week, setting up a showdown with the Senate, where Democrats vow to oppose anything but a simple increase in borrowing authority.

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