* Ryan eyes savings from benefits programs
* Lowered expectations seen improving chances for agreement
* "Can we get something better than this?"
By David Lawder
WASHINGTON, Oct 24 A new round of U.S. budget
negotiations starting next week should focus more narrowly on
replacing automatic spending cuts rather than an elusive "grand
bargain," House Budget Committee Chairman Paul Ryan said on
Ryan told Reuters in an interview that simply maintaining
the automatic "sequester" cuts was the fallback position for
Republicans if Democrats do not agree to substitute longer-term
savings on expensive federal benefits programs.
"We have spending cuts coming. The question is, can we get
something that's better than this?" said Ryan, last year's
Republican vice presidential nominee. "If we can get an
agreement, it's obviously going to be better than the status
He said reducing expectations could make the talks more
successful than past efforts, such as the 2011 "supercommittee"
that failed to find $1.2 trillion in savings over 10 years.
"My hope is that it has a better chance because we'll set
more rational expectations of what we're setting out to
achieve," Ryan said.
"If we focused on doing some big grand bargain, like those
prior efforts ... then I don't think we'll be successful because
we'll focus on our differences. Each party will demand that the
other compromises a core principle and then we'll get nothing
done," he said.
The 29-member negotiating committee, set in motion by last
week's deal to end a government shutdown and raise the federal
debt limit, will convene on Wednesday.
Ryan, who will lead Republicans on the panel, said there was
a better chance of finding common ground with Democrats on
"smarter" spending cuts to replace the across-the-board
reductions to discretionary spending. He said those include
reforms to "entitlements," which include the Medicare and Social
Security programs for the elderly, Medicaid healthcare for the
poor and some farm subsidy programs.
He noted that President Barack Obama had proposed changes to
those programs, such as a lower inflation gauge for the Social
Security retirement program's cost-of-living increases. His
Democratic counterpart, Senate Budget Committee Chairwoman Patty
Murray, also has proposed some ways to reduce healthcare costs
by $275 billion over 10 years through new efficiencies.
Both parties want to mitigate the sequester's impact,
especially with a further $109 billion round of cuts due to
launch on Jan. 15 - the same date that government agency funding
runs out again. Military programs favored by Republicans would
bear more than half of those cuts.
REVENUE STICKING POINT
Ryan reiterated his long-standing opposition to further tax
revenue increases as part of the budget negotiations, saying a
major tax hike for the wealthiest Americans in January was
already hurting the economy.
"If people see this conference as an excuse to raise taxes,
I don't think it's going to be successful," Ryan said.
Democratic Representative Chris Van Hollen, another member
of the budget panel, told Reuters on Tuesday that Democrats
would not agree to significant cuts in social programs without
increasing revenues by eliminating some tax breaks.
Without that, they will not consider proposals such as the
cost-of-living change or charging wealthier seniors more for
their Medicare health coverage, Van Hollen said.
If the two sides remain at loggerheads over revenues and
benefits cuts, Ryan said the sequester cuts would simply remain
in place, hitting agencies and programs ranging from education
to military readiness.
"It's not our preferred route to reducing deficit and
spending, but it works," he said, adding that Republicans were
"proud" of the fact it had produced tangible savings.
"If we can't replace these spending cuts with smarter
spending cuts, then we'll take what we have," he said.
He also said he believed the panel could help ease some
sequester pain on federal agencies and the military by offering
them more flexibility to spend their reduced budgets more
He also would like the panel to discuss ways to support
comprehensive tax reform, which he views as a revenue-neutral
endeavor that jolts economic growth by closing tax breaks,
reducing rates and simplifying a complex tax code.
The negotiating panel is due to issue a recommendation by
Dec. 13, requiring majority approval among panelists from each
chamber - seven House of Representatives members and 22 Senate
members. The Jan. 15 expiration of government funding creates
the threat of another government shutdown if the two sides
cannot come to some agreement.
Ryan said he was not interested in threatening another
shutdown, adding, "I'd rather focus on the here and the now
rather than Jan. 15."