U.S. Senate passes funding bill to avoid October 1 govt shutdown

WASHINGTON (Reuters) - A deeply divided and unproductive Congress wrapped up its final business before November's elections early on Saturday as the U.S. Senate passed a stopgap measure to fund federal programs and avoid an October 1 government shutdown.

The 62-30 vote on the funding bill, which now moves to President Barack Obama's desk to be signed into law, was delayed by days of partisan bickering over votes on unrelated measures aimed at boosting both Democrats' and Republicans' political fortunes.

For the new fiscal year which begins on October 1, the $524 billion measure slightly raises discretionary spending - which funds government agencies and everything from defense to national parks - from current levels.

It was needed because Congress' normal process of appropriating money for government operations broke down amid disagreements between Democrat and Republicans over spending levels and funding was due to run out after September 30.

"It is an inefficient way to fund the federal government but it is better than shutting it down next week," said Democratic Senator Daniel Inouye, the Democratic chairman of the Senate Appropriations Committee.

Congress' bitter fights over spending cuts and raising the debt limit last year led to threats of several shutdowns as temporary funding measures expired. The last time government funding actually ran out was late 1995 and early 1996, forcing then-president Bill Clinton to shut down non-essential services and furlough non-essential government workers for 28 days.

Saturday's vote allows lawmakers to return to their home states for a final re-election campaign push, but they leave a huge to-do list for their return after the November 6 election.

By keeping the government funded through March 27, Congress has somewhat lightened its post-election workload, which centers on dealing with expiring tax cuts, automatic spending cuts, a debt limit increase and other fiscal deadlines.

With relative peace over the budget, lawmakers will be able to takle more difficult questions - how to avoid $109 billion in automatic budget cuts that start on January 2, and whether to extend some or all of the tax cuts enacted under former President George W Bush, which expire December 31.

Moody's Investors Service has threatened to downgrade the U.S. credit rating if Congress' deliberations do not reduce budget deficits in a meaningful way. Economists warn that the United States will slide back into recession if Congress fails to take action to mute the massive impact of tax hikes and spending cuts.

IRAN RESOLUTION, HUNTING BILL

In other wrap-up business, the Senate also passed by a 90-1 vote a non-binding resolution insisting that the United States prevent Iran from obtaining nuclear weapons and ruling out any strategy aimed at dealing with a nuclear-armed Iran.

The only senator to vote against the resolution was Republican Rand Paul, a Tea Party and libertarian favorite, who argued that it was a de-facto declaration of war.

Paul had sponsored another measure that would suspend foreign aid to the governments of Pakistan, Egypt and Libya in response to recent attacks on U.S. interests in these countries, but this was soundly defeated by a vote of 81-10.

Senate Democrats also prevailed in a procedural vote that keeps alive legislation aimed at boosting the re-election chances of their colleague Senator Jon Tester, who is in a tight re-election race that threatens the narrow Democratic majority in the Senate.

Tester's measure would increase hunting and fishing access on public lands - a move popular in his home state - and the vote allows him to claim on the campaign trail that his plan is superior to a similar measure offered by his opponent, Republican Representative Denny Rehberg. (Editing by Louise Ireland)