Some critical services would continue during a shutdown, such as patrolling the borders and controlling air traffic. The State Department would continue processing foreign applications for visas, and embassies and consulates overseas would continue to provide services to American citizens.
Despite no signs of a compromise, Obama insisted he is "not at all resigned to a shutdown" and he expected to speak to congressional leaders throughout the day to address the impasse.
The president has vowed not to allow Republicans to use the spending bill to derail his most important domestic policy achievement.
"There's a pretty straightforward solution to this," Obama said at the White House. That's for "everybody to act responsibly and do what's right for the American people."
The prospect of a shutdown contributed to a decline in stock markets around the world. U.S. stocks sank as Wall Street worried the budget fight could lead to something much worse for the economy — a failure to raise the nation's borrowing limit.
Whether or not Congress averts a shutdown, Republicans are sure to move the healthcare fight to a must-do measure looming in mid-October to increase the borrowing cap. The U.S. risks a market-rattling, first-ever default on its obligations if Congress fails to raise that limit.
Both a shutdown and a default would be politically risky ahead of next year's congressional elections.
Some Republican leaders fear the public will blame their party for a shutdown if they insist on crippling health care reform. But individual House members may face a greater risk by embracing a compromise. Many represent heavily partisan congressional districts, and voters in primaries have ousted lawmakers, particularly Republicans, they see as too moderate.
Since the last government shutdown in 1995-1996, temporary funding bills have been noncontroversial, with neither party willing to chance a shutdown to achieve legislative goals it couldn't otherwise win.
But with the 3-year-old health care law nearing implementation, hardcore tea party conservatives are determined to block it.
There are few issues Republicans feel as passionately about as the health care reform, which they have dubbed "Obamacare." They see the plan, intended to provide coverage for the millions of Americans now uninsured, as wasteful and restricting freedom by requiring most Americans to have insurance.
A crucial part of the plan will begin Tuesday, whether or not the government partially closes: enrollment in new health care exchanges for millions of Americans. That's because most of the program is paid from monies not subject to congressional appropriations.
House Republican leaders met in Speaker John Boehner's office to plan their next move. Officials said that even though time was running short, they expected at least one more attempt to squeeze a concession from the White House, likely a demand to force a one-year delay in the requirement for individuals to purchase health coverage or face financial penalties.
Republican unity over their strategy showed unmistakable signs of fraying as the deadline neared. Several Republican senators and House members said they would be willing to vote for straightforward legislation that would keep the government functioning, with nohealth care-related provisions.
"We haven't given up on Obamacare ... but for this week we may have to give up," said Republican Rep. Doug Lamborn