* Obama seeks to tackle wasteful spending
* White House: proposal is different from line item veto (Adds senator quotes, GAO report)
By Jeff Mason
WASHINGTON, May 24 (Reuters) - President Barack Obama sent a proposal to Congress on Monday that would increase his ability to trim costs from congressional spending bills and fight the U.S. deficit.
The "Reduce Unnecessary Spending Act of 2010" would enable the president to submit a package of cuts, or "rescissions," to Congress for a vote after lawmakers pass the various appropriations bills that fund federal programs every year.
Obama, a Democrat, has made spending cuts a key ingredient in his efforts to reduce the U.S. budget deficit, which hit $1.4 trillion in 2009, just shy of 10 percent of the overall economy. Republicans charge that his policies' high price tags have helped inflate the deficit to unsustainable levels.
Obama's proposal, which requires congressional approval to become law, would give him and his successors a stronger hand in cutting "earmarks" and other expensive items they do not support from spending bills.
The president would deliver a slate of proposed cuts within 45 working days of a spending bill's passage. Congress would be required to look at the suggestions as a package and, without making any amendments, give them an up-or-down vote within a specific period of time.
"It adds to the arsenal in trying to cut back on unnecessary spending," White House budget director Peter Orszag told reporters on a conference call. "It's not a panacea, but it's an important additional tool."
The White House said the proposal differs from a line-item veto in which a president unilaterally cuts specific provisions from a spending bill. The Supreme Court rejected a presidential line-item veto as unconstitutional.
The proposal comes amid growing fears about high budget deficits in the United States and abroad. It also strikes at tensions between the executive branch and the legislative branch, which guards its control of the U.S. purse.
"The Congress has never served as a rubber stamp for any administration's budget request, and I see no reason why we would start doing so now," said Democrat Daniel Inouye, who heads the Senate committee that handles spending.
A CHANGE, BUT NOT A VETO
U.S. presidents currently have the authority to propose changes to spending bills, but Congress can make changes to the president's proposals if it wishes.
Since 1974, the White House has proposed $76 billion in rescissions and Congress has enacted $25 billion of them, according to the Government Accountability Office. Congress has enacted $210 billion in rescissions on its own in that period.
Obama is not the first president to seek greater power to pick through budget bills. President Bill Clinton, a Democrat, gained a line-item veto from Congress, but the Supreme Court struck that down in 1998. Republican President George W. Bush sought the same power.
Orszag said this proposal was different from a line-item veto because Congress would still have to pass the slate of proposed cuts before the president could sign them into law.
"The line-item veto gave the knife to the president. That was unconstitutional. Here we are providing a way for the president to give the knife back to Congress to help it cut out unnecessary fat," he said.
With congressional elections in November and voters increasingly nervous over record spending deficits, the proposal is likely to find some allies on Capitol Hill.
But some Republicans said Obama's proposals were disingenuous.
"The president would have this authority already if he and members of his administration hadn't blocked similar legislation when they served in the Senate," said Senate Republican leader Mitch McConnell.
Orszag's spokesman, Kenneth Baer, said Obama had not voted for a similar proposal when he was a senator because the version at the time went too far, allowing the president to seek cuts in social programs such as Social Security that are not touched in the current proposal.
Fiscally conservative Blue Dog Democrats are likely to embrace Obama's proposal, as it resembles a bill they introduced earlier this year.
"We know that restoring fiscal discipline to the federal government means putting strong budget enforcement tools in place," said Representative Jim Matheson, a Blue Dog leader.
(Additional reporting by Andy Sullivan; Editing by Cynthia Osterman)