WRAPUP 1-U.S. House Republicans ignore Obama veto threat on spending bill

Thu Sep 19, 2013 12:41pm EDT

* House Speaker Boehner predicts win on Friday

* House bill would deny funds for Obamacare

* Senate seen killing Obamacare provision

By Richard Cowan

WASHINGTON, Sept 19 (Reuters) - Republicans in the U.S. House of Representatives on Thursday plowed ahead with a bill to gut President Barack Obama's healthcare law while temporarily funding other government programs, ignoring a warning from the White House that the measure would be vetoed.

The bill, which would keep the government running through Dec. 15 and avert shutdowns with the start of the new fiscal year on Oct. 1, faced its first test vote in the House on Thursday with passage of the measure expected on Friday.

"We'll deliver a big victory in the House tomorrow," a confident House Speaker John Boehner told reporters.

The administration wasted no time in formally announcing that it would not allow rebellious House Republicans to destroy the "Obamacare" healthcare law by denying funds.

In a terse statement, the White House said the House bill would be vetoed "because it advances a narrow ideological agenda that threatens our economy and the interests of the middle class." The statement went on to say that "millions of hard-working middle class families" would be denied affordable health coverage.

This is the latest round in a series of battles Obama faces with Congress over the next few months in what has become an unending standoff over running Washington's most basic operations, from the FBI and national parks to education and military programs.

And the Dec. 15 cut-off date for the funding measure guarantees yet another struggle around Christmas time.

Besides the spending bill, Congress and the White House have to either agree in October or early November on a measure to increase U.S. borrowing authority or plunge the nation into a first-ever credit default.

In 2011, as Republicans and Democrats fought over these two same issues, U.S. financial markets swooned because of all the uncertainty created by Washington's inability to work together.

Between July 7 and Aug. 9 of that year, the Dow Jones Industrial Average blue-chip stocks plummeted 2,150 points, or 16.9 percent.

'STEALTH DEBT LIMIT' HIKE

The Republican bill is expected to attract no Democratic support and even some conservative opposition.

For example, Republican Representative Thomas Massie of Kentucky told Reuters that he planned to vote against the measure because "it's a stealth debt limit increase."

Massie was referring to a provision of the bill that would instruct the Treasury Department to pay bondholders and Social Security retirement benefits even if Congress fails to increase the government's $16.7 trillion borrowing cap that will soon be breached.

Assuming the House passes the Republican-backed bill to defund Obamacare and provide temporary government funds, it will be significantly altered by the Democratic Senate next week.

Democrats in that chamber plan to delete the House's Obamacare provision and send the temporary spending bill back to the House for passage before the Sept. 30 deadline when the current fiscal year ends.

Senate Democrats believe that more than a dozen Republicans in that chamber could back them since they are on record opposing linking Obamacare to keeping the government open. Some of those Republicans have described their House colleagues' ploy as "foolish," a "silly effort" and "the dumbest idea I've ever heard."

If the Senate kills the Obamacare defunding proposal and sends the House a basic temporary spending bill, Boehner and House Democratic leader Nancy Pelosi will then each face difficult decisions.

Since many House Republicans are expected to vote against final passage of the stripped-down measure, Boehner might have to decide whether to rely on significant Democratic support to win passage, a politically difficult move.

For Pelosi, the question will be whether to throw her weight behind a bill that continues deep, across-the-board spending cuts that Democrats want to end.

Many inside and outside of Congress are guessing that both leaders will hold their noses, keeping in mind that the alternative, an Oct. 1 government shutdown, is not an option.