WASHINGTON (CBSDC/AP) – Before speaking to members of the press regarding a potential government shutdown due to Senate infighting about the national budget, President Barack Obama began by discussing a phone conversation that he had with new Iranian President Hassan Rouhani.

As Obama noted, the call signifies the first direct communication between an American and Iranian president since 1979. He said he is hopeful that the talk will signify a “new relationship between the United States and the Islamic Republic of Iran … based on mutual interest and mutual respect.”

Obama on Tuesday welcomed the new Iranian government’s pursuit of a “more moderate course,” saying it should offer the basis for a breakthrough on Iran’s nuclear impasse with the United Nations and the U.S. He signaled a willingness to directly engage Iran’s leaders, tasking Secretary of State John Kerry with pursuing that diplomacy with Tehran.

“The roadblocks may prove to be too great, but I firmly believe the diplomatic path must be tested,” Obama said during an address to the U.N. General Assembly.

He added during Friday’s press conference, “Throughout this process, we will stay in close touch with our friends and allies throughout the region, including Israel.”

Obama then made several comments regarding Republican efforts to defund the Affordable Care Act, known also as Obamacare, through holdouts in budget negotiations. The economy fight, which restive conservatives want to use as leverage to dismantle Obama’s prized health care law, was certain to spill into the weekend at least. House GOP leaders are struggling to concoct a new version of the shutdown bill able to win approval in their chamber and clear the Senate, too.

“I said this yesterday, let me repeat it – that’s not going to happen,” he said.

A potential federal shutdown hurtling ever closer, the Senate dealt an emphatic defeat to a core of rebellious young conservatives Friday and approved legislation preventing government agencies from closing next week.

The 54-44 vote, however, hardly spelled an end to Washington’s latest down-to-the-wire budget drama. It remains unclear whether the Democratic-led Senate and the Republican-run House will be able to craft a compromise and rush it to Obama for his signature before the government has to tell hundreds of thousands of federal workers to stay home on Tuesday.

“If Congress chooses not to pass a budget by Monday, the government will shut down, as well as many vital services the American people depend on,” he noted, before mentioning a bipartisan agreement reached by Senate to resolve budget issues.

“Now, it is up to Republicans in the house to do the same,” he added, placing the onus on the GOP because “Democrats have a great interest in making sure … [these] services continue to help the American people.”

Obama also said that raising the debt ceiling  is “not a concession to [him],” and that not doing so would likely result in an “economic shutdown with impacts not just here, but around the world” because the United States is, in his words, the “bedrock of world investment.”

“Nobody gets to threaten the full faith and credit of the United States just to extract political concessions,” he stated. “No one gets to hurt our economy and millions of innocent people just because there are a couple of laws that you do not like.”

He said that his resolve is not just for his administration, but for future presidential administrations as well, before he urged the government to “pass a budget on time, [and] pay our bills on time.”

The high-stakes showdown was playing out in a climate of chaos, unpredictability and GOP infighting that was extraordinary even by congressional standards. Reflecting the building tension, Senate Chaplain Barry Black opened Friday’s session with a prayer that included, “Lord, deliver us from governing by crisis.”

Before final approval, the Senate voted 79-19 to reject an effort by some Senate conservatives to block final passage of the legislation. All 52 Senate Democrats and both Democratic-leaning independents voted for final passage of the overall bill. All Republicans voted no except for two who did not vote, Orrin Hatch of Utah and Arizona’s Jeff Flake.

(TM and © Copyright 2013 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2013 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)


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