House Republicans ignore Obama veto threat on spending bill

By Richard Cowan WASHINGTON (Reuters) - Republicans in the House of Representatives on Thursday plowed ahead with a bill to gut President Barack Obama's healthcare law while temporarily funding other government programs, ignoring a warning from the White House that the measure would be vetoed. The bill, which would keep the government running through December 15 and avert shutdowns with the start of the new fiscal year on October 1, cleared a procedural hurdle on Thursday, setting up debate and likely passage on Friday. "We'll deliver a big victory in the House tomorrow," a confident House Speaker John Boehner predicted. Several of Boehner's fellow Republicans in the U.S. Senate, however, have rejected the House plan as "foolish," a "silly effort" and one has described it as "the dumbest idea I've ever heard." The administration wasted no time in formally announcing that it would not allow the Republican-controlled House to destroy the Obamacare healthcare law by denying funds. In a terse statement, the White House said the House bill would be vetoed "because it advances a narrow ideological agenda that threatens our economy and the interests of the middle class." It went on to say that "millions of hard-working middle class families" would be denied affordable health coverage. Separately on Thursday, House Republicans took another step in their deficit-reduction drive by again defying an Obama veto threat and passing a bill to cut $40 billion over 10 years from the food stamp program that helps feed the poor. Boehner declined to say what the House might do if the Senate next week, as expected, rips out the Obamacare defunding provision and sends back to the House a bill to simply keep the government operating through December 15. But some lawmakers and aides said House Republicans were considering several options that could further delay passage of the legislation with the September 30 deadline looming. This is the latest round in a series of battles Obama faces with Congress over the next few months in what has become an unending standoff over running Washington's most basic operations, from the FBI and national parks to education and military programs. The December 15 cut-off date for the funding measure guarantees yet another struggle around Christmas time, when Democrats and Republicans were to fight over whether to scrap across-the-board spending cuts. Besides the spending bill, Congress and the White House have to either agree in October or early November on a measure to increase U.S. borrowing authority or plunge the country into its first credit default. House Republicans might unveil their debt limit increase proposal by the middle of next week. It is likely to include approval of the controversial Keystone oil pipeline from Canada to the U.S. Gulf of Mexico and tax and energy initiatives. REMINDERS OF 2011 MARKET SWOON In 2011, as Republicans and Democrats fought over spending cuts and a debt limit hike, U.S. financial markets swooned because of all the uncertainty created by the inability of the two parties to work together. Between July 7 and August 9 of that year, the Dow Jones Industrial Average blue-chip stocks fell 16.9 percent. This year, the fight over spending cuts and debt limit will be just as heated and so far, there are no signs of negotiations, but only some barbed comments by both sides. "While the president is happy to negotiate with Vladimir Putin (on Syria), he won't engage with the Congress on a plan that deals with the deficits that threaten our economy," Boehner told reporters. White House Press Secretary Jay Carney offered a different view. "We had a lot of constructive meetings (with Republicans this year), but what we never saw, from even the Republicans who said they were interested in common ground, was a counterproposal." Meanwhile, Republican Senator Ted Cruz, a darling of the Tea Party movement who is thought to be weighing a 2016 run for president, threatened a prolonged fight over the spending bill when it is debated in the Senate next week. The bill is expected to win little to no Democratic support and nearly unanimous backing from conservatives. One particularly controversial provision of the bill would instruct the Treasury Department to pay bondholders and Social Security retirement benefits even if Congress fails to increase the government's $16.7 trillion borrowing cap that will soon be breached. But money would not be available to pay for many government programs, including military salaries and health care benefits for the elderly. Earlier this week Treasury Secretary Jack Lew said, "There is no way of knowing the irrevocable damage such an approach would have on our economy and financial markets." Assuming the House passes the Republican-backed bill to defund Obamacare and provide temporary government funds, it will be significantly altered by the Democratic majority in the Senate. Democrats plan to delete the House's Obamacare provision and send the temporary spending bill back to the House for passage before the September 30 deadline when the current fiscal year ends. Senate Democrats believe that more than a dozen Republicans in the chamber could back them since they are on record opposing linking Obamacare to keeping the government open. Among them is Senator John McCain of Arizona who told CNN: "We're not going to defund Obamacare in the Senate." (Additional reporting by Roberta Rampton, Rachelle Younglai, Thomas Ferraro and David Lawder; Editing by Vicki Allen and Grant McCool)