White House, Democrats dig in against Republican budget threat

The White House and Senate Democratic leader have refused to bow to a Republican demand to strip US president Barack Obama's signature healthcare law of funding as a condition of funding the US government.

As the threat of a government shutdown looms in the latest budget row in Washington, White House press secretary Jay Carney said a shutdown would not be good politically for Mr Obama or help him in his plans to pass immigration reform as well as a budget.

"This is not a zero-sum game," Mr Carney said. "Everybody gets hurt when Washington does something stupid like inflict a wound on the economy unnecessarily, in which, in this case, Republicans would be doing it."

The Republican-controlled House of Representatives passed a Bill last Friday to keep the government funded past the fiscal year-end on September 30th but only if Congress agrees to withdraw funding for the law known as Obamacare, which penalises companies if staff are not covered by health insurance.

Bill before Senate
The Bill is now before the Democrat-led Senate where the majority party has pledged to remove the provision to defund Obamacare from the budget plan and return it to the House to be passed there.

House Republicans, led by speaker John Boehner, will then decide whether to approve the Senate-backed Bill, paving the way for Mr Obama to sign it or block it, leading to a government shutdown on October 1st and jeopardising a weak US economic recovery.

House Republicans, pushed by members of the far-right Tea Party who fear Obamacare will lead to job losses, could pass it, delaying a showdown until the middle of next month when Congress must pass a routine increase to the $16.7 trillion (€12.4 trillion) debt ceiling if the US is to avoid defaulting on its loans.

Harry Reid, the top-ranking Democrat in the Senate, vowed that Obamacare, which is due to start coming into effect on October 1st, would remain in place.

Senator Reid described Republicans intent on defunding Mr Obama or shutting down the government as “fanatics” with a mission like “Thelma and Louise” to drive the nation off a cliff, referring to the famous female buddy road movie.

“Are Republicans so intent on undermining President Obama and his signature healthcare law that they’re willing to inflict severe damage to our economy in the process,” he said in the Senate.

“America will know exactly who to blame: Republican fanatics in the House and the Senate.”

The last two government shutdowns, in late 1995 and early 1996, cost the US government $1.4 billion, according to the Congressional Research Service. The current cost of a shutdown has been estimated at about $2 billion based on an adjustment for inflation over the past 17 years.

Pew Research found that 39 per cent of people surveyed would blame Republicans if a federal budget cannot be agreed, while 36 per cent said they would hold Mr Obama responsible.

Mr Obama is expected to meet congressional leaders after the Senate votes on the Bill, which could come as late as Sunday, just two days before the new fiscal year. This would push the dispute right to the wire.