By David Morgan

WASHINGTON (Reuters) - The U.S. House of Representatives returns this week for an expected political brawl over spending cuts and impeachment that could paralyze the Republican-controlled chamber, as Congress struggles to avoid a government shutdown.

The House and the Democratic-controlled Senate are due to be in session for about 12 days before funding expires on Sept. 30, leaving little time to agree on a package of 12 appropriations bills that can pass each chamber and win Democratic President Joe Biden's signature.

The main bone of contention among House Republicans is a demand by roughly three-dozen members of the hardline House Freedom Caucus to cut spending for fiscal 2024 to $1.47 trillion -- about $120 billion less than Biden and Republican House Speaker Kevin McCarthy agreed in May.

The White House and Senate leaders -- including top Republican Mitch McConnell -- have rejected that demand.

That dispute and other hardline demands, including opposition to Ukraine aid and calls for an impeachment inquiry against Biden, could imperil efforts to pass a short-term stopgap, known as a continuing resolution or "CR," which would keep federal agencies afloat while lawmakers debate full-scale appropriations.

"Everything's coming to a head after a long recess," Republican Representative Kelly Armstrong told Reuters, referring to the six-week-long House summer break that ends Tuesday. "We're a pretty diverse caucus, with a five-vote majority. So, threading the needle is something that's really difficult to do."

McCarthy's eight-month-old speakership could be threatened if he seeks Democratic support to avoid a shutdown or fails to move forward with an impeachment inquiry that former President Donald Trump's House allies are seeking despite a lack of votes.

Political brinkmanship over the debt ceiling has already prompted the Fitch rating agency to downgrade U.S. debt to AA+ from its top-notch AAA designation, partly because of repeated down-to-the-wire negotiations that threaten the government's ability to pay its bills.

White House spokesperson Andrew Bates warned that failure to enact $24 billion in supplemental funding for Ukraine and $16 billion for disaster-stricken U.S. communities in states including Hawaii and Florida could put lives at risk, while delaying money to combat the deadly opioid fentanyl.

SOME PREFER SHUTDOWN

Hardline Republicans want offsets for spending on disaster relief and Ukraine aid included in any CR, as well as tighter immigration and border security policies.

"Without these spending cuts, we're a 'no' vote. I say 'we' - me and a good many others," Representative Ralph Norman, a Freedom Caucus member, said in an interview. "I'd rather shut the government down."

That could mean trouble for McCarthy's hopes of restarting action on spending legislation this week with an $886 billion defense appropriations bill.

The House, which Republicans control by a thin 222-212 majority, has passed only one appropriations bill so far.

The Senate plans to move forward on Monday with bipartisan bills. Senators of both parties hope floor action will give them the upper hand in negotiations with the House.

House hardliners vehemently reject a proposal to lump border security and Ukraine aid in a separate measure.

"We're going to have to see some significant win for the American people," Freedom Caucus Chairman Scott Perry told Reuters. "We've been abundantly clear, transparent and precise about how you get votes out of members in the Freedom Caucus."

Hardliners, who forced McCarthy to endure 15 floor votes before he became speaker in January, shut down the House floor in June to protest his spending deal with Biden.

Their demands have irked more centrist Republicans.

With the Senate and White House in Democratic hands, Representative Don Bacon said House Republicans should accept the higher spending level set by the McCarthy-Biden agreement and adopt a relatively clean CR.

"There's no reason to do a shutdown when you already have a bipartisan agreement," Bacon told Reuters. "I know that 20 or 30 people don't like it. But they don't represent the whole House and they don't represent the whole country."

Firebrand Representative Marjorie Taylor Greene vowed not to support funding measures unless the House votes to begin an inquiry on unproven allegations that Biden was involved in his son Hunter's overseas business dealings while vice president. Biden and the White House deny the claims.

Other Republicans reject the idea of tying an impeachment inquiry to the spending debate.

Democrats have dismissed impeachment talk as little more than an effort to distract from Trump's extensive legal woes.

" ... Until you have the votes, it seems kind of silly," Democratic Senator John Fetterman told reporters.