Republicans raise pressure on spending cuts
WASHINGTON (Reuters) - Republicans in the House of Representatives on Friday called a government shutdown "unacceptable" but raised pressure on President Barack Obama and his fellow Democrats to go along with deep spending cuts this year.
The two parties are fighting a pitched battle over public spending and must agree at least to a stopgap measure by next Friday or the government will run out of cash and non-essential services will shut down.
Energized by big wins in November elections, Republicans say any short-term funding for government operations must include deep savings.
"We don't want to shut the government down. This is not an acceptable or a responsible option for any of us ... but we want to see spending cuts," House Republican Leader Eric Cantor said in a telephone conference with reporters.
Republicans detailed some $4 billion in spending cuts for a two-week stopgap spending bill that the House will take up next week. The stopgap measure continues funding for two weeks for all programs except for some that already had been targeted for cuts in Obama's recent budget plan for fiscal 2012, which begins October 1.
The measure also eliminates funding that had been earmarked for lawmakers' pet projects for this year. Those include $293 million for transportation projects and $173 million for economic development projects.
CAN A SHUTDOWN BE AVOIDED?
A spokesman for Senate Democratic Leader Harry Reid said the proposal moves House Republicans closer to his party's position. Democrats had been combing through Obama's budget proposal looking for items they could cut.
"The plan Republicans are floating today sounds like a modified version of what Democrats were talking about," Reid spokesman Jon Summers said.
Democrats have been reluctant to cut too much too soon for fear it would hurt the struggling U.S. economy.
Investment firm Goldman Sachs estimates that deep cuts of $61 billion by September in a bill passed by the Republican-dominated House last week would significantly slow U.S. economic growth in the second and third quarters of this year. That bill was declared dead by the majority Democrats in the Senate.
A $4 billion cut in spending over two weeks would trim the government at about the same rate that House Republicans won in the bill their chamber approved.
The partisan stand-off over the budget comes amid growing nervousness among investors about chaos in the oil-rich Middle East and North Africa and a U.S. government shutdown could further unnerve global financial markets.
Thousands of federal workers could be laid off in a shutdown, hitting services for millions of Americans and yielding uncertain dividends -- or punishments -- for both political parties. A shutdown would most likely begin with the museums in Washington and national parks.
Lawmakers' goal will be to agree on a short-term measure by the March 4 deadline.
Democrats want to avoid deep cuts in a temporary stopgap measure and focus negotiations on the longer-term measure instead.
The government has been running on a series of massive temporary funding bills because Congress never enacted specific appropriations bills for this fiscal year, which ends on September 30.
(Reporting by Donna Smith and Kim Dixon; Editing by Vicki Allen and Eric Beech)
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