WASHINGTON, Sept 29 (Reuters) - Hardline Republicans in the U.S. House of Representatives on Friday rejected a bill proposed by their leader to temporarily fund the government, making it all but certain that federal agencies will partially shut down beginning on Sunday.
In a 232-198 vote, the House defeated a measure that would extend government funding by 30 days and avert a shutdown. That bill would have cut spending and imposed immigration and border security restrictions, Republican priorities that had little chance of passing the Democratic-majority Senate.
The Senate, meanwhile, has been advancing a bipartisan stopgap bill to fund the government through Nov. 17, though it was not clear when they would vote.
"It's not the end yet, I've got other ideas," Republican House Speaker Kevin McCarthy told reporters following the defeat of the bill he had backed.
He declined to say what those ideas were.
If Congress does not pass a spending package that can be signed into law by President Joe Biden before 12:01 a.m. ET (0401 GMT) on Sunday, U.S. national parks will close, the Securities and Exchange Commission will suspend most of its regulatory activities, and pay for up to 4 million federal workers will be disrupted.
U.S. Treasury Secretary Janet Yellen said on Friday that a government shutdown would "undermine" U.S. economic progress by idling programs for small businesses and children, and could delay major infrastructure improvements.
The shutdown would be the fourth in a decade and just four months after a similar standoff brought the federal government within days of defaulting on its $31 trillion debt. The repeated brinkmanship has raised worries on Wall Street, where the Moody's ratings agency has warned it could damage U.S. creditworthiness.
HEAVY TOLL ON MILITARY SAYS BIDEN
Biden warned that a shutdown could take a heavy toll on the armed forces.
"We can't be playing politics while our troops stand in the breach. It's an absolute dereliction of duty," Biden, a Democrat, said at a retirement ceremony for top U.S. general Mark Milley.
McCarthy had hoped the Republican spending bill's border provisions would have won over at least nine hardline holdouts who so far have defied efforts to avert a shutdown.
Democrats had warned that the Republican bill would slash benefits for poor women and children and resources for fighting wildfires.
In the end, 21 hardline House Republicans sided with Democrats to defeat the measure.
"Some of my colleagues couldn't really see that securing our border and cutting spending was the right way to go. And I think that was important," said Republican Representative Byron Donalds, a member of the hardline House Freedom Caucus who voted for the bill.
McCarthy notched a small win late on Thursday night when Republicans succeeded in passing three of four bills that would fund four federal agencies for the full fiscal year that starts Oct. 1. They stand no chance of passing the Democratic-controlled Senate and would not avert a shutdown because they do not fund the full government even if they do become law.
Holdouts say Congress should focus on these spending bills rather than temporary extensions, even if it leads to a shutdown.
"What does work is rolling up our sleeves and getting onto these single subject bills and moving them," Representative Matt Gaetz said on a podcast after voting against the stopgap bill on Friday.
Gaetz and a handful of other hardliners have threatened to oust McCarthy from his leadership role if he relies on Democratic votes to avert a shutdown.
"We're in the middle of a Republican civil war that has been going on for months, and now threatens a catastrophic government shutdown," top House Democrat Hakeem Jeffries told reporters.
Many House Republicans have also expressed frustration with their hardline colleagues.
McCarthy and Biden in June agreed to a deal that would have set agency spending at $1.59 trillion in fiscal 2024, but hardliners like Gaetz say that figure should be $120 billion lower. Lawmakers are not considering cuts to popular benefit programs such as Social Security and Medicare that make up a larger portion of the government's $6.4 trillion budget.
Former President Donald Trump, Biden's likely election opponent in 2024, criticized Senate Republicans for working with Democrats on a funding agreement.
Reporting by Moira Warburton and David Morgan; Editing by Alistair Bell, Jonathan Oatis and Grant McCool
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