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Republicans weigh defunding 'Obamacare' in U.S. spending measure

By David Lawder

WASHINGTON (Reuters) - A Republican leadership plan to avoid a direct threat to shut down the government is being derided by some conservatives as a "hocus-pocus" measure that falls well short of their demands for an "Obamacare" showdown.

Republican aides said the plan, which will be floated by House Majority Leader Eric Cantor to party members on Tuesday, would allow for an extension of government funding for several weeks past the September 30 fiscal year-end.

If accepted, the House could vote on the plan later this week.

Conservative Republicans want to use the deadline for a stop-gap government spending measure as leverage to stall President Barack Obama's signature health care law by withholding funds from its core components, notably the October 1 launch of new, online health care exchanges.

But that approach significantly raises the risk of a government shutdown, due to certain opposition in the Democratic controlled Senate and a likely veto from Obama.

The plan would involve procedures that split the measure into two parts after passage by the majority-Republican House, allowing the Senate to send Obama a clean government funding extension, but only after it takes a vote on de-funding Obamacare.

This would subject some Democratic senators in tight re-election races to cast difficult votes in support of the controversial health reforms, but it would likely amount to yet another Republican symbolic effort against Obamacare.

Some Republican aides said it would fail to take advantage of the leverage that Republians hold over the funding deadline.

"Some conservatives are calling this the hocus-pocus bill and it's meeting resistance," one House Republican aide said.

The influential conservative group Club for Growth on Monday came out against the plan, saying it was trying to "fool" Republicans into approving funds for the program.

"I hope this proposal is nothing more than a bad joke and is quickly discarded. Republicans should simply do what they say they are for by passing a Continuing Resolution that doesn't fund Obamacare," Club for Growth President Chris Chocola said in a statement.

Over the August recess, however, stopping the implementation of Obamacare was a top concern in Republican House districts, at least until the controversy over attacking Syria gained prominence. At numerous town hall forums, Republican voters implored their representatives halt the law's advance.

Some 80 House Republicans in August signed a letter urging House leadership to defund Obamacare in the spending measure, known as a "continuing resolution" or CR.

"I've been very clear. I want to vote on a CR that funds the government, keeps the government open and defunds Obamacare. That's what I want to vote on," said Representative Jackie Walorski, a Republican House Budget Committee member from Indiana.

With only nine legislative days scheduled in September by the House, there is little time for a lengthy debate over the government funding measure. The House also must stage a contentious vote on authorizing the use of military force against Syria.

Michael Steel, a spokesman for House Speaker John Boehner, declined to provide details of the funding measure to be considered later this week.

"We are confident we can address a resolution on the use of force in Syria and still meet our other obligations in a fiscally-responsible manner," he said in a statement.

The House has voted 40 times to repeal, delay or defund the health care law since its passage by Democrats in 2010, but each time, the effort has died in the Senate.

DEBT LIMIT LOOMS

Another fiscal deadline, and a potentially stronger leverage point for Republicans, looms in mid-October when Congress needs to pass an increase in the $16.7 trillion federal debt limit.

A significant number of Republicans also have opposed threatening a government shutdown over Obamacare funding because they say it would not accomplish much. Most of the funding for the law comes through mandatory programs such as Medicare health coverage for the poor, and the Obama administration has some discretionary authority over funding within the Department of Health and Human Services.

House Appropriations Committee chairman Harold Rogers has been advocating a simple extension of spending for agencies and discretionary programs until around mid-December at an annualized rate of $988 billion -- the current fiscal 2013 level after accounting for "sequester" automatic spending cuts.

A committee aide said the plan is aimed at buying time to reach a broader budget deal that resolves automatic "sequester" spending cuts and to pass full spending bills for fiscal 2014.

But that would be above the $967 billion fiscal 2014 funding level passed by the House in a plan authored by House Budget Committee Chairman Paul Ryan, which keeps sequester savings in place.

(Reporting By David Lawder)

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