U.S. President Barack Obama said on Monday that a government shutdown would have very real economic impact on the Americans.

"It does not have to happen," Obama said in a late afternoon statement in the White House. "All of this is entirely preventable if the House chooses to do what the Senate has already done, and that's the simple act of funding our government without making extraneous and controversial demands in the process."

He made the remarks as the deadlocked Congress makes the first government shutdown in 17 years seem probable.

"A shutdown will have a very real economic impact on real people, right away," Obama told reporters. "Past shutdowns have disrupted the economy significantly. This one will too," he added.

He noted that in the event of a government shutdown, hundreds of thousands of public servants will stay on the job without pay and several hundred thousands more will be immediately and indefinitely furloughed.

Putting the blame on the Republicans, Obama said they catered to the needs of the conservatives and continued to tie funding of the government to "ideological demands."

The Democrat-dominated Senate on Monday afternoon rejected a measure approved by the Republican-controlled House of Representatives, with amendments including one that ties funding for government agencies to a one-year delay of Obama's signature healthcare law.

The funding bill was kicked back to the House. Failure to reach an agreement on terms for funding the government by midnight Monday would force the first partial U.S. government shutdown since 1996.

"The Affordable Care Act is moving forward. That funding is already in place. You can't shut it down," Obama said, indicating that he is still willing to work with either party to make sure the healthcare law works better.

"Time is running out," Obama said, hoping that the Congress would do the right thing to avert a shutdown.