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Politics

Military not exempt from spending cuts: Republicans

WASHINGTON (Reuters) - U.S. military programs will not necessarily be exempt from sharp spending cuts Republicans in the House of Representatives plan to put forward in coming months, incoming House Republican Leader Eric Cantor said on Tuesday.

House Republicans have previously said defense and domestic security programs would be exempt from their efforts to trim $100 billion from the U.S. budget.

But speaking on the day before his party takes control of the House, Cantor did not rule out defense cuts. “Everything is going to have to be on the table,” he told reporters.

Cantor’s comments come as the Obama administration is readying its own package of defense spending cuts in an effort to close a budget deficit that hit 8.9 percent of GDP in the last fiscal year. Obama has also proposed a salary freeze for federal workers.

Defense Secretary Robert Gates is expected to announce as early as Thursday about $100 billion in savings for the Pentagon and cuts to some weapons programs, including a ground-missile launching system and an amphibious landing craft.

Any cuts to the $508 billion defense budget would come on top of as-yet-unspecified cuts to domestic spending programs Republicans promised before winning control of the House in the November congressional elections, Cantor said.

Those cuts could decimate domestic programs in education and environmental protection, but would not affect entitlement programs like Social Security and Medicare, which are expected to grow sharply as 7,000 baby boomers each day reach age 65 and become eligible for them.

Cantor and other Republican leaders have been tight-lipped so far about where the ax may fall on domestic spending. “Everybody is going to have to do more with less,” Cantor said. “That’s where the private sector is, that’s where families are and that’s where government is going to have to be.”

Other Republicans have been more willing to get specific.

CUTS TO PRESCHOOL, JOB TRAINING, ETHANOL?

Representative Jeff Flake, a fiscal hawk who will have a say in spending as a member of the Appropriations Committee, told Reuters he will push for cuts to the Head Start preschool program, ethanol subsidies, Homeland Security grants and job training programs.

The Pentagon should not be exempt, he said.

“For those who say we can’t touch it and shouldn’t touch it, that’s absurd -- we’ve got to,” Flake told Reuters. “There’s no way we’re going to have the fiscal responsibility we need without addressing defense spending.”

Democrats have warned spending cuts could impede the sluggish economic recovery and hurt those struggling to make ends meet when unemployment is hovering at 9.8 percent.

They say they are willing to consider some spending cuts, to ensure markets the United States is willing to get its budget under control. But any Republican efforts to cut spending too sharply could founder in the Senate, which remains under Democratic control, or face a veto from Obama.

Republicans will get a chance to enact their cuts in March, when current government funding expires.

That is around the time the Treasury Department nears its $14.3 trillion debt ceiling. Conservative activists are likely to resist any move to raise the debt ceiling higher, but a failure to do so would risk a catastrophic default that could paralyze the government and roil bond markets.

Republicans may try to combine the debt-ceiling vote with a commitment for long-term spending cuts to ease the political pain, but it is unclear whether they will be able to do so.

Republicans have proposed a rule that would require any permanent spending increases to be offset with spending cuts elsewhere in the budget, narrowing a Democratic rule that allows lawmakers to raise taxes to pay for spending increases.

Republicans expect Obama to outline spending cuts of his own during his State of the Union address at the end of the month, Cantor said.

Additional reporting by Kim Dixon and Thomas Ferraro; editing by Todd Eastham

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