* Democrats may ban filibusters on executive branch nominees
* Reid says Republicans guilty of partisan obstructionism
* McConnell accuses Democrats of "power grab" (Adds new Reid quotes, details and Republican reaction)
By Thomas Ferraro
WASHINGTON, July 11 (Reuters) - U.S. Senate Majority Leader Harry Reid on Thursday scheduled votes next week on seven of President Barack Obama's embattled executive-branch nominees, setting up a showdown with Republicans over rules used to block confirmations.
Unless Republicans allow all seven to be confirmed, Reid told reporters, "I'm going to do what I need to do," adding, "This place doesn't work" under the current rules.
Speaking to reporters following a closed-door session he held with his fellow Democrats, Reid was thought to be referring to a possible move to strip Republicans of their ability to block executive branch nominees with a procedural hurdle known as the filibuster.
The seven nominees are: Gina McCarthy to head the Environmental Protection Agency, Thomas Perez to be U.S. labor secretary, Richard Cordray for director of the Consumer Financial Protection Bureau and Fred Hochberg to serve a second term as head of the U.S. Export-Import Bank, along with votes on three members of the National Labor Relations Board.
The Senate requires 67 votes to change its rules, including those regarding filibusters. But under a procedural power play known as "the nuclear option," Reid could do it with just 51. His Democrats control the Senate, 54-46.
Their aim would be to reduce to a simple majority from 60 votes now needed to end filibusters on executive branch nominees. A 60-vote threshold would remain for judicial nominees as well as legislation, aides said.
While indicating he was prepared to force the rules change, Reid still held out hope the situation could be defused.
"We'll have to wait to see what the weekend brings," Reid said of the possibility that Republicans would allow the seven executive branch nominees to be confirmed.
If all seven were to be confirmed next week, Reid said there would be no need to pursue the nuclear option. "Hallelujah," he said of that potential outcome.
Reid told reporters he had the 51 Democratic votes needed to change the rules if the nominees are not confirmed next week.
In response, Republican leader Mitch McConnell said: "These are dark days in the history of the Senate."
In a heated exchange on the Senate floor earlier Thursday, Reid accused McConnell of breaking an agreement reached in January to make the Senate confirmation process more efficient and less hostile.
McConnell angrily denied it and accused Reid of concocting "a phony crisis" as an excuse to break his own promise on Senate's rules.
"If this isn't a power grab, I don't know what a power grab looks like," McConnell roared.
VOWS OF REVENGE
Reid charged that Republicans have blocked nominees not because they are unqualified, but because Republicans often do not like the pro-consumer, pro-labor and pro-environment agencies that they have been named to head. He also accused Republicans of delaying votes on nominees who eventually win broad support, just to hobble the Obama administration.
McConnell countered that scores of Obama's nominees have been confirmed this year, including a number of his Cabinet secretaries, many with broad bipartisan support. He accused Reid of trying to pick a fight to fire up the Democrats' liberal base, particularly organized labor.
Some Republicans suspect that if Reid eliminates the filibuster on executive branch nominations, it would not be long before Democrats do the same for legislation.
Republican Senator Lamar Alexander, who has fashioned himself as somewhat of a bridge to opposition Democrats, warned that a rules change would make him devote all his energies to winning a Republican majority in the Senate.
"Then Republicans will be in a position to do whatever Republicans with 51 votes want to do," as he sketched out a conservative agenda that includes altering the Dodd-Frank financial regulation law, repealing Obama's healthcare law and approving the Keystone oil pipeline from Canada through the United States.
"The nuclear option" has been threatened over the years by both parties to abolish or curb the filibuster. But it not been used, largely because the Senate majority knows it will eventually be back in the minority and would want the filibuster in its arsenal.
Some Republicans urged calm and suggested that Democratic and Republican senators huddle in a private meeting to try to resolve differences. That meeting is set for Monday.
In unusually harsh language, McConnell said that unless Democrats "pull back from the brink," Reid "is going to be remembered as the worst leader of the Senate ever." (Additional reporting by Richard Cowan and David Lawder; Editing by Karey Van Hall, Vicki Allen and Stacey Joyce)