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WASHINGTON (AFP) – U.S. President Barack Obama accused his critics Wednesday of extorting him over raising the U.S. debt ceiling, as a Republican budget gamble brought the prospect of a government shutdown ever closer.

Obama and his Republican foes in Congress are locked into entrenched positions over lifting the $16.7 trillion borrowing cap and a government operating budget.

The president is angry that conservatives in the House want to create an “ideological fight” over the debt ceiling by making its extension contingent on a delay in implementation of his cherished health care law, known as Obamacare.

If there is no compromise — an increasingly likely prospect — government operations will grind to a halt on October 1 and the United States could default on its debts by the middle of next month, a first-ever scenario which could have alarming domestic and international implications.

“You have never seen in the history of the United States the debt ceiling or the threat of not raising the debt ceiling being used to extort a president or a governing party,” Obama told business leaders.

He said he was ready to deal with Republicans over budget issues, but “what I will not do is create a habit, a pattern, whereby the full faith and credit of the United States ends up being a bargaining chip to set policy. It’s irresponsible.”

House Speaker John Boehner earlier appeared to cave in to Republican conservatives, who have threatened to vote against any deal on a temporary budget — known as a continuing resolution, or CR which would defer a shutdown — unless it defunds the health law and keeps this year’s automatic spending cuts in place.

“This week the House will pass a CR that locks the sequester savings in and defunds Obamacare,” Boehner told reporters after meeting for an hour with his caucus.

Boehner dismissed accusations he has lost control of his troops.

“We have a plan that they’re happy with, we’re going forward,” Boehner said. “The fight over here has been won.”

But with just 12 days to negotiate a temporary budget, schedulers cancelled next week’s planned recess, telling members that the House would be in session from next Wednesday and possibly through the weekend until completion of the CR.

Amid the political heat, the administration signalled it was bracing for shutdown, with the Office of Management and Budget’s director Sylvia Burwell sending a memo to federal agencies outlining preparations for their closure.

While there was “enough time for Congress to prevent a lapse in appropriations,” and a CR would be the preferred outcome, “prudent management requires that agencies be prepared for the possibility of a lapse,” Burwell wrote.

Boehner stood firm in assuring that “there’s no interest in our part in shutting the government down,” but a fiscal showdown — like the one in 2011 which spooked markets — was in store over the debt limit.

“This year is not going to be any different,” he said.

Senate Majority Harry Reid said he was now awaiting whatever “absurd” legislation the House might send his way.

He savaged Boehner for being beholden to “anarchists” of the far-right, and said the Democratic-led Senate would not pass legislation that defunds the health care law.

What Reid is likely to do is take the House-passed CR, strip out the language that defunds Obamacare, and try to rally to his side half a dozen mainstream Republicans like Senator Richard Burr, who has denounced the political suicide of linking a shutdown to defunding Obamacare.

A more portentous battle may lie ahead. The Republican leadership announced it would unveil a plan that extends U.S. borrowing authority while delaying implementation of the health care law.

Exasperated Democrats called on Republicans to work in good faith to raise the debt limit.

“This game of political chicken has to end,” said Xavier Becerra, chairman of the House Democratic caucus.

Senator Chuck Schumer struck a more apocalyptic tone.

“I’m more worried about default than I’ve ever been,” he said.

Senator Bob Casey noted the potential calamity of default, saying “the adverse consequences that flow from this (are) almost unimaginable.”

Meanwhile, after more than 40 House votes to repeal Obamacare, conservative Republicans unveiled their party’s first comprehensive alternative to the health law.

The 181-page bill by the Republican Study Committee would provide a tax break for Americans who purchase their own health insurance and would seek to help defray costs of high-risk patients.

Chairman Steve Scalise told AFP that while his committee would “use everything we have to achieve delay and defunding of Obamacare,” they were not seeking a government shutdown or a credit default.

Photo Credit: AFP/Jewel Samad

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