January 25, 2011 / 4:17 PM / 7 years ago

UPDATE 4-Republicans tee up February U.S. budget clash

* House will contrast spending cuts with Obama's budget

* Republicans have not figured out what to cut yet

* Nonbinding vote before State of the Union speech (Adds Rand Paul proposal)

By Andy Sullivan

WASHINGTON, Jan 25 (Reuters) - Congressional Republicans on Tuesday sought to put President Barack Obama on the defensive ahead of his State of the Union speech as they pressed their plans to slash domestic spending.

The Republican-controlled House of Representatives approved a symbolic measure that touts their intention to slash domestic spending by at least 18 percent in the coming weeks.

The actual vote to cut spending will come during the same week that Obama is expected to unveil his budget proposal for the coming year, House Republican leader Eric Cantor said.

The scheduling decision by the No. 2 Republican in the House sets up a head-on clash over spending the week of Feb. 14, a time when Congress is usually focused on the president's spending proposals for the coming fiscal year.

Republicans have announced plans to roll back domestic spending to 2008 levels to narrow trillion-dollar-plus budget deficits when current funding expires in March.

That would mean sharp, sudden cuts to programs like environmental enforcement, education funding and transit that Obama's fellow Democrats have bolstered in the intervening years.

"This is how serious we are on delivering on our commitment to cut spending," Cantor told a news conference.

Obama is expected to call for a five-year spending freeze for some types of domestic spending in his State of the Union speech later on Tuesday.

"There's going to be at least initially during 2011 a competition between the Obama White House and the House Republicans to dominate the story line and to be ahead of the curve on what is the major policy issue for this year," said Ethan Siegal, an analyst with The Washington Exchange who tracks Congress for investors.

Annual budget deficits, which hit $1.3 trillion last year, are at their highest level compared to the overall economy since World War Two.

SPENDING VOTE BEFORE OBAMA'S SPEECH

The nonbinding resolution, which passed the House by a vote of 256 to 165, would allow Budget Committee Chairman Paul Ryan to cap domestic spending at 2008 levels, a first step in the process of cutting current government funding.

"The days are over of unlimited spending, of no prioritization, and the days of getting spending under control are just beginning," said Ryan, who is slated to give the Republican response to Obama's speech later in the evening.

Democrats have mocked the measure as an empty exercise that holds purely symbolic value because it does not include any actual limits on spending.

"Instead of being serious about a number they wanted to deliver a press release," said Representative Chris Van Hollen, the top Democrat on the Budget Committee.

Lawmakers in charge of spending will be hard-pressed to complete their work on the timetable laid out by Cantor.

"We haven't even begun the process yet" of determining which areas will be cut, said Representative Denny Rehberg, who oversees education and healthcare funding.

Rehberg told Reuters he would like to maintain current levels for aid to poor students and those with learning disabilities, but he did not know if that was possible.

"Everybody's going to have to take reductions, there are no sacred cows anymore," he told Reuters.

Conservatives are pressing for deeper cuts. At least 89 House Republicans have signed a letter calling for the House to cut domestic spending by a total of $100 billion from current levels, nearly double the amount that Ryan is expected to put forward.

In the Senate, newly elected Republican Rand Paul unveiled a budget plan that he said would save $500 billion over one year by eliminating education, housing and other programs that he said should not be handled by the federal government.

His plan is not likely to get much traction in the Democratic-controlled chamber.

Both Obama's proposed freeze and Republicans' planned cuts target a section of the budget that only accounts for 13 percent of all federal spending. Entitlement programs like Medicare and Social Security, as well as defense and security spending, would be exempt.

The two sides will have to reach an agreement on funding levels by early March to avoid a government shutdown.

Because Congress failed to pass a budget last year, the government is currently operating on a temporary extension of the previous year's budget.

The Senate is likely to resist the deep cuts favored by Republicans, and some observers expect Congress will ultimately opt to extend the current funding levels until the new fiscal year begins in October.

Republicans hope to impose even deeper spending cuts in fiscal 2011, the year covered by Obama's budget proposal. (Reporting by Andy Sullivan; editing by Anthony Boadle and Cynthia Osterman)

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