* Republican Cole sees small, two-year deal to ease cuts
* Short-term funding considered to avoid shutdown threat
* Democrats say talks too slow, see no movement on taxes
By David Lawder and Richard Cowan
WASHINGTON, Dec 3 (Reuters) - Republicans in the U.S. House of Representatives might seek a vote next week on a short-term government funding measure as a backup plan in case budget negotiators fail to reach a deal by a Dec. 13 deadline, lawmakers said on Tuesday.
The move would be aimed at shoring up consumer confidence during the Christmas shopping season. It would demonstrate Republicans intend to fund the government beyond a Jan. 15 deadline, rather than resort to the tactics they employed in October that led to the closing of many federal agencies.
“I don’t think anybody wants to be worried about a government shutdown over Christmas,” said Republican Representative Blake Farenthold, who in mid-October voted against a deal to end the 16-day government shutdown.
Although House Speaker John Boehner has not yet made a decision to proceed with another temporary spending bill, aides were taking the steps necessary to allow a vote before a planned Dec. 13 recess if a budget deal is not enacted by then.
The move comes as the budget talks were set to intensify this week, with Republicans saying negotiators were closing in on a small-scale deal to slightly ease automatic spending cuts. Democrats told a less optimistic story, saying a deal was far from certain and talks were slowed by significant differences.
The Democratic leader of the budget talks, Senator Patty Murray, was returning early from a Senate holiday recess to continue her discussions with Representative Paul Ryan, the lead Republican negotiator, Ryan told reporters.
“I think they’re close. They both want a deal. I think they’re down to the last few items,” said Representative Tom Cole, a Republican on the 29-member budget panel. “They’ve clearly narrowed the gap substantially since they started this.”
He added that Murray and Ryan, “are both careful to say they don’t have a deal.”
Cole believed their discussions would lead to a small deal that would set a spending level for fiscal 2014 of around $1 trillion, a slight increase above the default $967 billion level that would keep “sequester” automatic spending levels in place. The fiscal 2013 post-sequester spending level was $988 billion.
But the size of the deal and how to pay for it were still under negotiation and could change quickly. Potential revenue sources that have been discussed, according to congressional aides, include higher airport security fees for air travelers and proceeds from the sale of wireless communications spectrum.
Cole added that Ryan wants a two-year deal that would provide some fiscal certainty for 2015 and avoid an autumn budget showdown ahead of mid-term elections in November 2014.
“If we get a bigger deal, that would be great, but I don’t think that is probably in the cards,” Cole said. “If we get two years worth of stability where they can plan, and no further cuts, that’s no small achievement in this environment.”
Ryan brushed past reporters after a meeting in the Capitol on Tuesday, saying only that talks with Murray were “going well.”
Neither side has made concessions on principles they hold dear. Democrats have been icy toward federal healthcare and retirement benefit cuts that Republicans want, while Republicans have refused to consider Democrat demands to increase revenue by eliminating some tax breaks.
That has frustrated Democrats, who described the talks as slow and said it was unclear if there would be a deal.
Representative Chris Van Hollen said it was a “jump ball” whether the panel could reach an agreement by the Dec. 13 deadline, when the House leaves for its Christmas break, partly because Republicans have taken any tax revenue off the table.
“Things are moving way too slowly. We really need to accelerate the pace,” Van Hollen said.
Another sticking point is Republicans’ demand for “fairly deep cuts” to federal employee retirement benefits, a program that is separate from the Social Security pension system, one congressional aide said.
Steny Hoyer, the second-ranking House Democrat, whose Maryland district is home to thousands of federal workers, said the budget process was “broken, that there is not a positive engagement by our Republican friends.”
He said he is expecting Republicans to seek a vote next week on a backup stop-gap spending plan, but said he could not support one that kept in place the $967 billion spending level, the lowest in a decade.
A spokesman for House Speaker John Boehner said he has made no decision yet to proceed with a short-term measure. Late last month, Boehner said he was prepared to move one if the budget talks failed to produce an agreement.