UPDATE 3-U.S. House moves federal government closer to shutdown
* Republicans continue to push for "Obamacare" delay
* Senate expected to reject loaded-up funding bill
* Obama threatens veto
By Thomas Ferraro and Caren Bohan
WASHINGTON, Sept 28 (Reuters) - In a decision that could make a U.S. government shutdown hard to avoid on Tuesday, the House of Representatives on Saturday prepared to reject an emergency spending bill approved by the Senate and push instead to delay President Barack Obama's healthcare reform law.
The vote by the Republican-controlled House was set to begin Saturday night. But there was little doubt about the outcome among Republicans, who cheered and chanted jubilantly in a meeting earlier Saturday after choosing their course of action.
Democrats were grim. "The government is going to shut down," said Representative Jim Moran of Virginia. "The only question now is for how long."
Senate Majority Leader Harry Reid, also a Democrat, said the Senate, which is not scheduled to meet until 2 p.m. EDT on Monday (1800 GMT), would not accept any funding measure aimed at derailing the 2010 healthcare restructuring known as Obamacare.
And Obama threatened on Saturday to veto any bill that contained such a measure.
The high-stakes maneuvering between Democrats and Republicans is likely to continue through much of Monday, with little time remaining before government funding runs out.
The impasse is the culmination of more than three years of failed conservative efforts to repeal "Obamacare," a health insurance program aimed at extending coverage to millions of those without coverage.
Republicans argue that "Obamacare, which is set to launch on Oct. 1, is a massive and unnecessary government intrusion into medicine that will cause premiums to skyrocket and damage the economy.
They have attached a provision to delay the program to a "must-pass" bill that would continue funding the government when the fiscal year ends at midnight on Monday.
Failure to pass the bill would close down much of the government for the first time since 1996. More than a million federal employees would be furloughed from their jobs, with the impact depending on how long a shutdown lasted.
The current timetable could leave House Speaker John Boehner with the most difficult decision of his career: whether to approve a straight-forward spending bill passed on Friday by the Senate or allow the government shutdown to begin.
A shutdown could be averted, however, if 17 of the 233 House Republicans break from their party and vote with the Democrats.
MEDICAL DEVICE TAX
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.
While polls consistently show the American public is tired of political showdowns and opposed to a shutdown, House conservatives were happy about the coming fight.
"This is a win-win all the way around," said Arizona Representative Matt Salmon, who described the mood of Republicans as "ecstatic."
Republicans said they would also approve a bill repealing a tax on medical devices that helps fund the healthcare law to the tune of about $30 billion. That provision, sought with heavy lobbying by the medical device industry, has been supported in the past by some Democratic senators.
Republicans said they would separately approve a bill to ensure members of the U.S. military continued to be paid if government funding was cut off. If Democrats vote against that bill, Republicans are likely to accuse them of hurting U.S. troops.
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 civilian federal employees - from people who process forms and handle regulatory proceedings to workers at national parks and museums in Washington - would be temporarily out of work.
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 Boehner.
This time, Boehner tried to avoid a showdown but was overruled by his rebellious caucus, largely influenced 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."