House defies Obama by passing spending-cut bill

WASHINGTON Sat Feb 19, 2011 9:28am EST

Speaker of the House John Boehner speaks to the Conservative Political Action Conference (CPAC) in Washington February 10, 2011. REUTERS/Joshua Roberts

Speaker of the House John Boehner speaks to the Conservative Political Action Conference (CPAC) in Washington February 10, 2011.

Credit: Reuters/Joshua Roberts

WASHINGTON (Reuters) - The House of Representatives on Saturday approved legislation to cut federal spending deeply through September, a plan that is sure to be stopped by President Barack Obama and his fellow Democrats in the Senate.

The Republican-backed bill is a challenge to Obama to show he is serious about closing record budget deficits and sets up the possibility of government shut downs if a compromise is not worked out by March 4, when current funding expires.

On a largely partisan vote of 235-189, House Republicans passed the bill to cut spending by about $61.5 billion from current levels, marking a victory for Tea Party conservatives elected in November.

It would slash spending on many domestic programs by 14 percent, but leave untouched some of the biggest budget items including the Social Security pension program and the Medicare and Medicaid healthcare programs for the elderly and poor.

House Speaker John Boehner said the legislation was part of Republican efforts "to liberate our economy from the shackles of out-of-control spending."

But Democratic Leader Nancy Pelosi said the Republican-backed bill would damage the economy.

"They have made matters worse - passing a spending bill that destroys jobs, weakens the middle class, hurts schools and young adults, eliminates assistance to homeless veterans, and diminishes critical investments in our future," Pelosi said.

Obama has outlined his own plan for less severe spending cuts in 2012, and has warned that tightening the belt too much too soon could harm the slow economic recovery.

Boehner called on Senate Democratic Leader Harry Reid to arrange an immediate Senate vote on the House-passed bill.

"Cutting federal spending is critical to reducing economic uncertainty, encouraging private-sector investment, and creating a better environment for job creation in our country," Boehner said.

Democrats, who hold a slim majority in the Senate, oppose many of the spending cuts and provisions in the bill to deny funds for the new healthcare law as well as environmental rules. The Senate will write its own version of a government funding bill for this fiscal year, which ends on September 30. The two chambers will try to come together on a single spending plan as the March 4 deadline looms.

The House spending cuts reflect Republican opposition to federal regulation, which they say hampers business growth, and distaste for taxpayer dollars being used for programs ranging from job training and food aid for the poor to NASA space exploration.

HEALTHCARE

In one of the most significant moves during a week of House debate, Republicans passed amendments stopping the Obama administration from carrying out the landmark healthcare reforms enacted last year.

Republicans campaigned against that law all last year, saying it places burdensome regulations on business and stifles job creation.

Many Democrats defend the healthcare law's expansion of medical coverage to the uninsured and toughening of consumer protections. They pledge to defend the law in the Senate.

The Supreme Court ultimately is expected to decide the law's constitutionality and its fate.

Democrats say they also want to begin shrinking a deficit that is projected to be around $1.65 trillion this year, equivalent to 10.9 percent of the economy. Senate Democrats are likely to write a spending bill for this year that cuts funds, but not as steeply as the House.

This spending bill is one of three major fiscal-related measures Congress will work on this year. The others are the fiscal 2012 budget and legislation the Obama administration desperately wants to raise government borrowing authority that is projected to be exhausted in April or May.

The failure of any one of the measures could bring government shutdowns and economic repercussions worldwide. These budget fights also could have a bearing on Obama's re-election efforts next year.

House Republicans, especially new Tea Party-backed conservatives, offered hundreds of amendments in a move to deliver on their small government promises.

As a result, the House-passed bill relaxes some gun controls and blocks the Environmental Protection Agency from starting to regulate carbon dioxide and other greenhouse gases blamed for global warming. EPA would not even be allowed to collect data on such pollution, despite a Supreme Court ruling that it had the power to protect against this health hazard.

An amendment that would have required the Treasury Department to pay interest on debt, instead of funding government programs, if Washington's borrowing authority runs out, was never brought up for a vote.

The huge bill also blocks proposed Federal Communications Commission rules for Internet providers, takes $747 million out of food assistance to the poor, cuts money for community health centers and would kill the Corporation for Public Broadcasting.

But the Pentagon would get $8 billion more this year in its budget that totals around $700 billion for the year.

(Additional reporting by Donna Smith and Thomas Ferraro; Editing by Mohammad Zargham and Vicki Allen)