WASHINGTON — The federal government lurched toward a partial shutdown at midnight on Monday after Republicans stubbornly demanded changes in the nation's health care law as the price for essential federal funding and President Barack Obama and Democrats adamantly refused.
Shortly before midnight, the Office of Management and Budget issued a memo instructing federal agencies to "now execute plans for an orderly shutdown due to the absence of appropriations."
With Congress hopelessly gridlocked, Obama said hundreds of thousands of federal workers would be furloughed and government operations ranging from veterans' centers to national parks and most of the nation's space agency would be shuttered.
He laid the blame at the feet of House Republicans, whom he accused of seeking to tie government funding to ideological demands, "all to save face after making some impossible promises to the extreme right wing of their party."
House Speaker John Boehner, R-Ohio, responded a short while later on the House floor. "The American people don't want a shutdown and neither do I," he said. Yet, he added, the new health care law "is having a devastating impact. . . . Something has to be done."
The stock market dropped on fears that political gridlock between the White House and a tea party-heavy Republican Party would prevail, though analysts suggested significant damage to the national economy was unlikely unless a shutdown lasted more than a few days.
While an estimated 800,000 federal workers faced furloughs, some critical parts of the government — from the military to air traffic controllers — would remain open.
Any interruption in federal funding would send divided government into territory unexplored in nearly two decades. Then, Republicans suffered grievous political damage and President Bill Clinton benefitted from twin shutdowns.
Now, some Republicans said they feared a similar outcome. "We can't win," said Sen. John McCain, R-Ariz.
"We're on the brink," Sen. Barbara Mikulski, Md., said shortly after midday as the two houses maneuvered for political advantage and the Obama administration's budget office prepared for a partial shutdown.
On a long day and night in the Capitol, the Senate torpedoed one GOP attempt to tie government financing to changes in "Obamacare." House Republicans countered with a second despite unmistakable signs their unity was fraying — and Senate Democrats promptly rejected it, as well.
That left the next move up to Boehner and his House Republican rank and file, with just two hours remaining before the shutdown deadline of midnight.
They decided to re-pass their earlier measure and simultaneously request negotiations with the Senate on a compromise, a move that some GOP aides said was largely designed to make sure that the formal paperwork was on the Senate's doorstep at the moment of a shutdown.
Whatever its intent, Senate Majority Leader Harry Reid, D-Nev., rejected it. "That closes government. They want to close government," he said.
As lawmakers squabbled, Obama spoke bluntly about House Republicans. "You don't get to extract a ransom for doing your job, for doing what you're supposed to be doing anyway, or just because there's a law there that you don't like," he said. Speaking of the health care law that undergoes a major expansion on Tuesday, he said emphatically, "That funding is already in place. You can't shut it down."
Some Republicans balked, moderates and conservatives alike.
Rep. Phil Gingrey of Georgia said it felt as if Republicans were retreating, given their diminishing demands, and Rep. Scott Rigell of Virginia said there was not unanimity when the rank and file met to discuss a next move.
Yet for the first time since the showdown began more than a week ago, there was also public dissent from the Republican strategy that has been carried out at the insistence of lawmakers working in tandem with GOP Sen. Ted Cruz of Texas.
Rep. Charles Dent, R-Pa., said he was willing to vote for stand-alone legislation that would keep the government running and contained no health care-related provisions. "I would be supportive of it, and I believe the votes are there in the House to pass it at that point," the fifth-term congressman said.
Other Republicans sought to blame Democrats for any shutdown, but Dent conceded that Republicans would bear the blame, whether or not they deserved it.
Hours before the possible shutdown, the Senate voted 54-46 to reject the House-passed measure that would have kept the government open but would have delayed implementation of the health care law for a year and permanently repealed a medical device tax that helps finance it.
The impact of a shutdown would be felt unevenly.
Many low-to-moderate-income borrowers and first-time homebuyers seeking government-backed mortgages could face delays, and Obama said veterans' centers would be closed.