Senate advances US budget but shutdown threat remains

With the clock ticking toward a possible US government shutdown, the US Senate voted unanimously Wednesday to advance a stopgap spending bill.

The 100-0 vote masked deep divisions within Congress over how to thrash out a measure that funds government operations beyond Monday, the final day of the current fiscal year.

The Senate will now debate legislation passed by the House of Representatives that funds government through December 15, but which also strips President Barack Obama's three-year-old health care law of all its funding.

The Senate's Democratic majority leader Harry Reid has vowed to strip the bill of this health care provision, insisting that nothing that defunds so-called "Obamacare" will pass his chamber.

Reid said he will also amend the bill to fund government until November 15 instead of mid-December.

The Senate is on track to pass its legislation "sometime on Sunday," Reid said, leaving the lower house 48 hours or less to either pass the amended bill or send a re-worked counteroffer back to the Senate.

"I would hope we can expedite this," Reid said. "We have a lot to do and I hope we can get there as quickly as we can."

If no deal is reached, many government agencies would shut down from Tuesday, and hundreds of thousands of federal workers would be ordered to stay home with no pay.

Conservative Senator Ted Cruz took to the floor on Tuesday for an extraordinary, 21-hour speech railing against Obamacare as "the biggest job killer in this country.

"The American people want to stop this madness, and so do I," Cruz said.

Many Republicans have expressed opposition to the strategy, warning it could leave insufficient time for the House to consider the Senate measure.

They said Republicans would be blamed for a shutdown debacle and it would hurt the party's standing with voters.

Meanwhile, a congressional source said House Republicans were considering reworking their budget measure to include a one-year delay of Obamacare's so-called individual mandate, which requires nearly all Americans to have insurance by January 2014 or pay a fine.

"It is an option that some people like," a Republican aide told AFP.

The House Republican caucus is expected to meet early Thursday to mull its options.

Democrats warn that including health care fights in the budget negotiations is flirting with disaster.

"They're going to take us right to the brink," Senator Dick Durbin fumed.

White House spokesman Jay Carney weighed in, saying "it would be irresponsible to not fund the essential functions of the government out of ideological pique."

As lawmakers squabble over the way forward, another fiscal crisis -- the need to raise the US debt ceiling -- was rapidly approaching.

Treasury Secretary Jacob Lew warned that the government will reach its statutory debt cap by October 17, and that failure to raise it would lead to "catastrophic" default.

"If we have insufficient cash on hand, it would be impossible for the United States of America to meet all of its obligations for the first time in our history," Lew said in a letter to House Speaker John Boehner.

Lew urged Congress to "act immediately" and increase the borrowing ceiling, which has been locked at $16.7 trillion since May.

Some Republicans suggest turning the debt debate into the next Obamacare battle front, saying the House could pass a measure this week that raises the debt ceiling but delays elements of the health law.

House Democratic leader Nancy Pelosi is squarely opposed to that approach, and she crafted a letter to Obama signed by 185 members of her House caucus warning that a default "would cause immediate and irreparable harm" to America's economy.

"We will support a clean extension of the debt ceiling when the House takes up this issue," Pelosi wrote.

During a bruising 2011 budget battle, the matter of raising the debt ceiling was wrapped into the spending fight, and Lew reminded lawmakers that the 2011 impasse "caused significant harm to the economy."

That fight was resolved just hours before Treasury could have defaulted, but nevertheless led to an historic downgrade of the US credit rating, the first time the United States has ever lost its AAA status with Standard & Poor's.