House Republican leaders set to break US budget deal

Tue Mar 13, 2012 11:18pm EDT

Related Topics

* Boehner, Cantor press for $1.028 trillion discretionary cap

* Republican aides say cuts may not be enough for conservatives

* Spending bill impasse, September shutdown battle feared

By David Lawder

WASHINGTON, March 13 (Reuters) - Republican leaders in the U.S. House of Representatives are ready to break a hard-fought budget deal with Democrats as they try to quell a revolt by conservatives who are insisting on deeper spending cuts ahead of the November elections.

House Republican aides said on Tuesday that House Speaker John Boehner and Majority Leader Eric Cantor were pressing for a modest $19 billion reduction of discretionary spending caps in this year's Republican budget plan.

The August 2011 deal to end a summer debt limit drama - which nearly prompted a first-ever default on U.S. Treasury debt - called for a $1.047 trillion cap on discretionary spending for fiscal 2013. Conservative House Republicans last week launched an effort to reduce that amount by as much as $116 billion, presenting Boehner a new leadership challenge.

But even the $1.028 trillion compromise figure that Boehner and Cantor were insisting that members in the Republican-controlled House support would cause problems with spending bills later this year, Republican aides said.

Democrats would not support even a small reduction from last year's carefully crafted agreement, and $19 billion in cuts is not likely to be deep enough to draw the support of the most conservative Republicans, especially those backed by the conservative Tea Party movement.

"I'd say that's probably not going to be enough for my boss," said an aide to a congressman involved in the budget negotiations who is a senior member of the conservative Republican Study Committee. The group pressed for a considerably lower cap of $931 billion.

Republican lawmakers pressing for more aggressive deficit reduction now insist that the spending cap in the August deal is a ceiling, not a floor - there is nothing illegal about spending less. Democrats see the cap as part of a binding budget law.

But both Republican and Democratic aides fear an impasse on spending bills that would threaten a potential government shutdown battle just weeks before the November election. The current spending authority expires on Sept. 30.

Standard & Poor's rating agency cited gridlock in Congress over spending and deficit reduction issues in its historic decision last year to downgrade the U.S. credit rating a notch from Triple-A status.

"Our economy cannot afford another one of these senseless demonstrations by the Tea Party. The American people are sick of these manufactured crises," Senate Majority Leader Harry Reid said as he castigated House Republicans on Tuesday for trying to back away from prior commitments.

"I'm really disappointed that they're considering a budget - violating the budget agreement that is now the law of this country. This was designed to avoid another government shutdown or a threat of a shutdown."

Aides for Boehner and Cantor referred questions about the budget negotiations to House Budget Committee Chairman Paul Ryan, who is preparing a budget plan to be unveiled next week.

A spokesman for Ryan would only say that the budget plan was "on track and on schedule".

SPENDING-CUT CAMPAIGNS

Conservative House members want to be able to demonstrate a more proactive approach to cutting deficits to use in their re-election campaigns, a senior House Republican aide said.

Many of the 87 first-term Republicans, for example, were elected on promises to slash wasteful federal spending, and some have voted against all spending bills.

After bruising battles on payroll tax extensions and contraception issues, talking about spending cuts and deficits may prove more effective for Republicans.

But the Ryan budget resolution is not binding and Reid vowed that it would die in the Senate.

"It's a symbolic, substance-free vote with substantive consequences for the appropriations process," the senior Republican aide said of support for deeper discretionary cuts.

But there was some room for conservatives to support the compromise $1.028 trillion cap - if the Republican budget contains enough savings on mandatory spending programs like Medicare and Social Security to reach balance within 10 years, another Republican aide said.

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