* Ryan says tax-hike talk will sink budget panel
* Lawmakers call for no new government shutdown threat
* Murray: Unfair to make seniors, families bear burden alone
By David Lawder and Caren Bohan
WASHINGTON, Oct 30 U.S. lawmakers launched a new
round of budget talks on Wednesday with pledges to work toward
easing automatic government spending cuts, but drew familiar
partisan battle lines over boosting tax revenues to help pay for
The 29-member congressional negotiating panel, commissioned
under this month's deal to end a government shutdown and lift
the federal debt limit, has until Dec. 13 to agree on a plan
that would at least reduce the effects of $109 billion in
spending cuts looming in 2014.
Opening statements from both Republicans and Democrats were
consistent with recent comments from some lawmakers that a
"grand bargain" to reduce deficits by more than $1 trillion is
simply not possible in the current environment. Instead,
lawmakers said it was important to focus on a smaller deal to
ease the automatic "sequester" spending cuts.
"I want to say this from the get-go: If this conference
becomes an argument about taxes, we're not going to get
anywhere," said Representative Paul Ryan, the House of
Representatives Budget Committee chairman, who is leading the
Republicans on the panel.
Democratic leaders of the conference committee said they
wanted part of any budget savings to come from increased revenue
raised by closing some tax breaks for corporations and wealthy
Ryan and other Republicans said the sequester cuts, which
hit the military and domestic discretionary spending, should be
shifted to expensive federal benefits such as the Social
Security retirement program and the Medicare health insurance
program for the elderly.
Any savings from eliminating tax deductions and subsidies
should instead be used to lower tax rates, Ryan said, arguing
that would spur stronger economic growth, leading to increased
"Let's focus our energy on the task at hand: a budget that
cuts spending in a smarter way," said Ryan, his party's vice
presidential nominee last year.
The panel's Democratic leader, Senate Budget Committee
Chairwoman Patty Murray, said she was prepared to make some
compromises on spending cuts, but only if Republicans were
willing to do the same on taxes.
"While we scour programs to find responsible savings,
Republicans are also going to have to work with us to scour the
bloated tax code - and close some wasteful tax loopholes and
special-interest subsidies," Murray said, adding it was "unfair
- and unacceptable - to ask seniors and families to bear this
The panel will next convene publicly on Nov. 13, but members
and staff will hold informal discussions over the next two
NON-TAX REVENUE HOPE
Representative Tom Cole, a moderate Republican on the panel,
offered a ray of hope for some middle ground on revenue,
proposing that the panel consider moves that would increase
Those include allowing corporate profits held overseas to be
repatriated at a lower tax rate than the current 35 percent,
encouraging more money to be brought back and invested in
job-creating projects. He also suggested offering more leases
for oil and gas drilling on federal lands and offshore, and
one-time federal asset sales.
"More revenue doesn't, and shouldn't, mean higher taxes,"
said Cole, who is from energy-rich Oklahoma.
Asked by reporters after the meeting whether he would
consider any revenue from closing tax breaks, he joked he wanted
to "leave a little bit of helpful ambiguity."
The budget panel has 22 senators and seven House members.
Any deal would need a majority vote in each chamber. Democrats
control the Senate, while Republicans control the House.
DIVISION ON BENEFIT CUTS
While Democrats were united in their demand for revenues to
ease the sequester, some argued against cutting programs that
aid the elderly and the poor.
Representative James Clyburn of South Carolina, the
third-ranking House Democrat, said such cuts would reduce
spending on other goods and services, slowing economic growth.
"Cutting benefits cuts jobs and cutting jobs is not the way
to reduce the deficit," Clyburn said.
Members of the negotiating panel from both parties cautioned
against another government shutdown threat after this month's
16-day closure of many federal agencies.
While there is no immediate consequence if the committee
fails to reach a deal by Dec. 13, the government would face a
new shutdown threat on Jan. 15 as the current funding extension
expires. On the same day, a new round of automatic "sequester"
spending cuts would be due to start.
"Let's pledge to do this - not shut the government down,"
said Senator Lindsey Graham, a South Carolina Republican, adding
he did not see a lot of room for reconciling vastly different
longer-term budget visions.
"I hope we can find a way to fund this government through
September. That would be good for all of us," Graham added.
While many Republican conservatives have sought to keep the
automatic spending cuts in place, the next round of cuts would
hit the military harder next year with about $20 billion more in
cuts compared to 2013.
That may motivate some Republicans to push for alternative