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Obama warns gov't shutdown would wreak economic havoc

US President Barack Obama speaks to members of the press in the briefing room of the White House September 27, 2013 in Washington
US President Barack Obama speaks to members of the press in the briefing room of the White House September 27, 2013 in Washington.

With the US government less than 100 hours from a crippling shutdown, President Barack Obama on Friday warned Republicans to stop appeasing "extremists" and pass a budget or risk economic chaos.

The president hailed the Senate for clearing a stopgap federal funding measure that knocked the ball into the House of Representatives, where a diehard conservative faction is bent on thwarting Obama's health care law.

The Republican-led lower chamber will likely tweak the bill and send it back to the Senate, which could leave insufficient time for the legislation to pass both chambers before a fiscal year-end deadline of midnight Monday.

"Over the next three days, House Republicans will have to decide whether to join the Senate and keep the government open or shut it down because they can't get their way," Obama said.

Republicans, who are overwhelmingly opposed to so-called "Obamacare," inserted a provision in the House budget measure that strips funding for the health care law, but the Democratic-led Senate removed it and sent the bill back.

Some Republicans would now like to see the Obamacare fight shift to the next fiscal battle -- the need to raise the debt ceiling.

The Treasury says it will reach its $16.7 trillion borrowing cap by October 17 and if Congress does not raise it the country will default on its debts for the first time in history.

The president made clear he would brook no quarter, saying a default "would have a profound destabilizing effect on the entire economy -- on the world economy."

"We've got to break this cycle," Obama added. "My message to Congress is this: do not shut down the government. Do not shut down the economy. Pass a budget on time. Pay our bills on time."

With the threat of a shutdown likely already having "a dampening effect on the economy," Obama suggested it was time for House apeaker John Boehner to isolate the "extremists" who are holding the Republican Party captive.

"Nobody gets to threaten the full faith and credit of the United States just to extract political concessions," Obama said. "No one gets to hurt our economy and millions of innocent people just because there are a couple of laws that you do not like."

House leaders insist they do not want a shutdown or a default, and they have scheduled sessions for Saturday and possibly Sunday in their effort keep government doors open beyond Monday's end of the fiscal year.

But Senate Majority Leader Harry Reid said his chamber's bill was the only one that could prevent a shutdown.

"This is it. Time is gone," Reid said after the Senate voted along strict party lines, 54 Democrats to 44 Republicans, to approve federal funding until November 15.

The Democrat also challenged Boehner to bring the stripped-down budget bill to a House vote.

"The bill we just passed would pass the House overwhelmingly if the speaker had the courage to bring it to the floor and let 435 members of the House of Representatives vote. I think they should think very carefully about their next step," he said.

As the clock ticks down, Republicans stressed that Obama was merely commenting from the sidelines, not meeting with or even phoning Boehner over the past week to thrash out a compromise.

"The House will take action that reflects the fundamental fact that Americans don't want a government shutdown and they don't want the train wreck that is Obamacare," Boehner spokesman Brendan Buck said.

"Grandstanding from the president, who refuses to even be a part of the process, won't bring Congress any closer to a resolution."

As Congress and the White House bicker, the Pentagon on Friday announced worrying details of how a shutdown would effect the department.

It said the US military's nearly 1.4 million troops will stay on the job in the event of a shutdown, but not get paid until Congress appropriated funds to compensate them.

And if government agencies close, about half the Defense Department's nearly 800,000 strong civilian work force would be ordered to stay home.