The prospect of a shutdown increased sharply over the weekend when Republicans in the House of Representatives agreed to fund the US government but only if Democrats agreed to a one-year delay to Mr Obama’s signature healthcare reforms.
The Republican proposal was immediately rejected by Mr Obama who has repeatedly said he will not compromise over the main legislative achievement of his first term which is still bitterly opposed by Republicans.
Leaders in the Democrat-controlled senate promised to reject the Republican proposal when they meet on Monday afternoon and will throw it back at the Republican leadership in the House who will then have only eight to 10 hours to decide how – or if - to avoid a shutdown.
A US Government closure would hit non-essential services such as National Parks network, and passport and driving licence renewals, and estimates say could cost the US economy up to $2bn dollars as about 800,000 US Federal government workers were put on temporary unpaid leave.
As the deadline approached, both sides accused the other of intransigence and recklessness, as the apparently intractable divisions between Republicans and Democrats that have crippled the working of Washington in recent years were again laid bare.
The White House and Democrat Senate leaders accuse a hardcore of 50 or so anti-government “Tea Party” Republicans of holding the US nation to ransom in order to extract concessions that would roll back healthcare reform.
“After weeks of futile political games from Republicans, we are still at square one,” Harry Reid, the Democrat leader in the Senate said, promising to reject the Republican request for a one-year delay, saying he would not be “extorted by Tea Party anarchists”.
Mr Obama has said he will negotiate on spending priorities, but will not accept the linking of Republican demands for changes to Obamacare to the passage of a new so-called “continuing resolution” to fund the government, the last of which expires at midnight on Monday.
“No one gets to threaten the full faith and credit of the United States of America just to extract ideological concessions,” the president said in his weekly address to the nation.
“No one gets to hurt our economy and millions of innocent people just because there are a couple laws you don’t like. It hasn’t been done in the past, and we’re not going to start doing it now.”
The last US government shutdown in 1995-96 came after a stand-off between the-then Democrat president Bill Clinton and the bombastic Republican Speaker of the House, Newt Gingrich - the Republicans were widely seen to have paid a heavy political price for forcing that shutdown.
The debate over whether to use government funding as a weapon to extract concessions over Obamacare has bitterly divided the Republican Party, with the more moderate leadership caution Tea Party members against repeating the mistakes of 1995.
However the Tea Party elements remained unbowed on Sunday, saying that it was the refusal of the White House and Democrat-controlled senate’s to compromise over Obamacare – not Republicans standing on principle - that should be blamed for any shutdown.
“If we have a shutdown, it will be because Harry Reid holds that absolutist position and essentially holds the American people hostage,” said Senator Ted Cruz, the Texas republican who has become a stand-bearer for Tea Party activism in the senate.
“So far, Majority Leader Harry Reid has essentially told the House of Representatives and the American people, ‘go jump in a lake,’" Mr Cruz told NBC News, “His position is, 100 percent of Obamacare must be funded in all instances. Other than that, he’s going to shut the government down.”
Despite the fiery rhetoric on both sides, others did hold out the possibility of a last minute compromise if – as promised – the Senate rejects the Republican proposal to delay Obamacare.
Kevin McCarthy, the third-ranked Republican in the House of Representative said there were “several options” to keep the government open, but did not elaborate what they might be. Rand Paul, a Republican senator proposed a House-Senate conference to resolve differences.
However with Democrats saying they were determined not give ground on Obamacare, and Republicans demanding some concession over healthcare, it was unclear on Sunday night how a compromise could be worked out.
The fight over passing a new Continuing Resolution prefigures a potentially much more serious dispute later next month, when Congress will have to extend the Debt Ceiling which the US Treasury estimates will be reached by October 17.
Economists warn that if partisan politics leads to a failure to agree to a new Debt Limit it would have far-reaching consequences for both the US and the global economy as the holder of the world’s reserve currency is threatened with default.
