Congress, seeking to head off the chaotic effects of a government shutdown, met in a rare holiday session Monday as lawmakers weighed a Democratic compromise budget that would scale back proposed increases in Medicare fees.

The House, weary and bitterly divided, passed the new budget plan well after midnight and sent it along to the Senate. To offset the Medicare savings and still achieve a $500 billion deficit reduction, the proposal could lead to tax increases even beyond the original $134 billion proposal.The Senate has been marking time ever since the House voted down the bipartisan agreement put together last week by President Bush and congressional leaders. Senators were convening Monday afternoon in hopes agreement could be reached before the government shutdown takes hold Tuesday, after the Columbus Day weekend.

The most noticeable effect of the shutdown during the weekend was the locked doors on the Smithsonian museums in Washington and closed parks and recreational facilities across the nation. But Tuesday, a government shutdown would take wide effect, sending hundreds of thousands of federal workers home on unpaid furloughs, and stopping their services to the public.

In an attempt to avoid this, Democrats sought to develop a plan acceptable to the Senate and Bush - and popular enough to gain the support of rank-and-file members who rejected the original plan.

Senate leaders signaled they could accept the House plan. "I want the process to move ahead," said Senate Republican Leader Bob Dole, R-Kan., who called it a "very small departure" from the original bipartisan package.

After bitter debate, the House plan was approved 250-164, and the House then worked until 3:45 Monday morning to approve, 305-105, an emergency spending bill that would end the government shutdown that began Saturday when spending authority ran out.

Bush had vetoed a previous emergency bill, but it wasn't clear what course he now would take. House Republicans voted against the Democratic plan, 136-32.

Democratic leaders had redrawn the original bipartisan budget to entice more liberals from their majority party, and they gave it overwhelming support and passed it despite fractured Republican opposition.

"With all my heart, I believe the country is at stake. These deficits cannot go on," said House Majority Leader Richard Gephardt, D-Mo., culminating the debate on the revised budget.

Because of the budget dispute, Congress and the president have failed to enact the constitutionally required spending bills for fiscal 1991, which began Oct. 1.

Bush began shutting down the government at 12:01 a.m. Saturday and then, saying he wanted to keep pressure on for budget action, vetoed an attempt by Congress to enact a temporary spending bill to keep the government open while budget talks continued.

The White House sent word that Bush would accept a temporary spending bill in absence of a budget agreement if it included a pro-rata share of the savings contained in the failed bipartisan budget. But Democrats rejected that feature in a 224-186 vote.

The House planned to return to session Monday evening in case further action was needed to end the shutdown.

The new budget was similar overall to the plan worked out by White House and congressional negotiators in more than four months of talks.

It promises $500 billion in deficit reduction, $40 billion in the fiscal year that began Oct. 1, the same as in the bipartisan package that failed in the House last Friday despite strong backing from the president.

But while the original plan called for $60 billion in Medicare fee increases and cuts in payments to hospitals and providers, the new plan would cut that by a third - half of which might be made up with new taxes. That could bring the total of new taxes to $145 billion over the next five years.

The original plan outlined a specific tax program including new levies on gasoline, fuel oil, cigarettes, alcohol and other items. The Democratic version leaves the specifics for later and opens the door to other possibilities - including Bush's demand for a cut in the capital gains tax and Democratic insistence on a hike in taxes on the rich.

"It's a new day but it's not a new deal," said Rep. William Thomas, R-Calif. "It's the same old shift."

Rep. Robert Torricelli, D-N.J., told Republicans who were not offering a plan of their own, "Get out of the way so the rest of us can start governing America."

In addition to the government shutdown, the budget stalemate resulted in the national debt limit reverting Saturday to $3.123 trillion, effectively cutting off the Treasury's credit limit. The bill would raise the limit back to its previous $3.195 trillion through Oct. 20.