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U.S. House votes to block funds for health care law

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WASHINGTON (Reuters)—The Republican-led U.S. House of Representatives voted Friday to block funding of the health care reform law, but the Democratic-led Senate seems certain to reject it.

The vote was part of a sweeping bill to cut federal spending by $61 billion this fiscal year.

The ultimate fate of the health care law is likely to be decided in the federal courts where it is now being challenged.

The move against the health care law—one of President Barack Obama's biggest legislative victories—has escalated tensions over federal spending that could lead to a government shut-down.

Republicans attached the measure to block spending to implement the health care law—which they have derided as a costly government intrusion into the marketplace—to a bill to fund the federal government through September.

Financial markets are closely watching fights over spending, as President Obama and Republicans position themselves for the 2012 presidential election and Republicans flex their muscles after victories last year in which they picked up a majority of House seats.

Political gridlock could cause a shutdown of government next month, and Democrats have warned of a catastrophic U.S. debt default in the worst-case scenario.

A temporary bill to fund the government expires March 4, and failure to reach agreement means lawmakers will either have to pass another stopgap spending bill or allow many government operations to come to a halt.

After voting on the health care amendment, the House was expected to approve the broad spending bill, which would slash domestic programs for the rest of this fiscal year by about $61.5 billion from current levels, Friday or early Saturday.

Rep. Sander Levin, D-Mich., blamed the risk of a federal shutdown on Republicans and their amendment to block the law aimed at ensuring more Americans get health insurance and to provide consumer protections in the health care industry.

"Instead of searching for common ground, this amendment intensifies warfare," Rep. Levin said. "The Republicans have become a wrecking crew."

Republicans say the health care law burdens doctors, insurers and employers with unnecessary costs and bureaucracy as the country is slowly recovering from a recession.

'Repeal this'

Polls show Americans are sharply divided on the health care law. Republicans cite their elections wins last year to justify holding back health care law money.

"The American people in November said it's time not only to repeal this but to defund this," Rep. Tom Graves, R-Ga., said.

The health care amendment is just one of many Republican measures, a number of them backed by the tea party movement that helped Republicans win the House, that President Obama and the Senate are expected to reject.

On Thursday, the House approved an amendment to deny $131 million for the U.S. Securities and Exchange Commission, which could hinder its attempts to implement last year's Dodd-Frank financial regulation law that cracked down on Wall Street.

President Obama has outlined his own plan for less severe spending cuts in 2012 to shrink a deficit expected to be around $1.65 trillion this year, equivalent to 10.9% of the economy.

He has warned that tightening the belt too much too soon could harm the slow economic recovery.

Conservative Republicans were also pushing an amendment on Friday to give the Treasury Department the ability to avoid a debt default if U.S. borrowing authority runs out, highlighting possible dire consequences of political gridlock over government spending.

The proposal has been described by Treasury Secretary Timothy Geithner as "unworkable." And even if it gets through the House, it is certain to be blocked in the Senate.