UPDATE 2-U.S. Republicans reject Senate bid to avoid government shutdown
* Conservatives still pushing for Obamacare delay
* House votes expected late on Saturday
WASHINGTON, Sept 28 (Reuters) - The U.S. government edged closer on Saturday to a shutdown as Republicans in the House of Representatives rejected an emergency spending bill approved by the Senate and pushed instead for a one-year delay of President Barack Obama's healthcare reform law.
In the latest round of high-stakes brinkmanship between Democrats and Republicans, Republican leaders said after a closed-door meeting, punctuated by loud cheering, that the House would vote later on Saturday on their latest plan to scuttle the healthcare law, known as "Obamacare."
It would then return to the Senate. Democrats in the Senate have already defeated one House proposal to derail Obamacare and Senate Majority Leader Harry Reid said they would do so again, calling the Republican move "pointless."
A Democratic aide said the Senate would "strip everything out" of the House measure and "send them back a clean bill."
As of Saturday afternoon, the Senate was deciding on when to meet, but the timing may leave only hours for it to act.
Neither side wants to be the last to cast the final vote that would lead to a shutdown, a concern that has turned the funding measure into a hot potato being tossed between the two chambers until the last minute.
While polls consistently show the American public is tired of political showdowns and opposed to a shutdown, House conservatives were jubilant about the fight ahead.
"This is a win-win all the way around," said Arizona Representative Matt Salmon, who describe the mood of Republicans as "ecstatic."
Since the healthcare measure is attached to a must-pass bill to continue funding the government when the fiscal year ends at midnight on Monday, its failure would close down much of the government for the first time since 1996.
For good measure, Republicans said they would also approve a bill repealing a tax on medical devices that helps fund the healthcare law.
In an effort to signal their seriousness about a shutdown, as well as cover themselves from political fallout, Republicans said they would separately approve a bill to ensure that members of the U.S. military continue to be paid if government funding is cut off.
In a government shutdown, spending for functions considered essential, related to national security or public safety, would continue along with benefit programs such as Medicare health insurance and Social Security retirement benefits for seniors.
But hundreds of thousands of civilian federal employees -from people who process forms and handle regulatory proceedings to workers at national parks and museums in Washington - would be furloughed.
The healthcare law, set for launch on Tuesday, will provide insurance coverage for millions of uninsured Americans through exchanges.
Republicans object strongly to Obamacare, calling it a massive and unnecessary government intrusion into medicine that will damage the economy.
The last government shutdown ran from Dec. 16, 1995 to Jan. 6, 1996 and was the product of a budget battle between Democratic President Bill Clinton and Republicans, led by then-Speaker of the House Newt Gingrich.
Republicans suffered a public backlash when voters re-elected Clinton in a landslide the following November, a lesson never forgotten by senior Republicans, including House Speaker John Boehner.
This time, Boehner tried to avoid a showdown but was overruled by his rebellious caucus, dominated since the 2010 election by newcomers endorsed by the conservative Tea Party movement.
With Boehner effectively sidelined, rank-and-file Republicans boasted of their unity. Members chanted "vote, vote, vote, vote," in their closed-door meeting, they reported later.
Afterward, Democratic Representative Louise Slaughter of New York, took to the House floor to accuse Republicans of throwing a "temper tantrum" about Obamacare under pressure from "Tea Party extremists."
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