Republicans to Seek $35-Billion Cut in Opening Fight Over Budget

House Republicans announced they will seek $35 billion in 2011 spending cuts in what shapes up as the first in a series of battles this year with Democrats over the federal budget.

Agriculture, energy, water, commerce, transportation and housing programs would face cuts this year of as much as 17 percent as the House Republican majority aims to cut non- security discretionary spending by $43 billion from last year’s levels.

Labor, health-care and education programs would shrink by 4 percent, as would foreign aid and international programs. Congress’s budget would see a 2 percent cut. Defense would grow by $8 billion, or 2 percent, from 2010 levels while homeland security funding would be frozen.

Washington’s spending spree is over,” House Budget Committee Chairman Paul Ryan, a Wisconsin Republican, said in a statement yesterday. “House Republicans will continue to build upon this down payment, working to restrain the explosive growth of government and to help restart America’s engine of economic growth and job creation.”

The plan represents a retreat from Republicans’ “Pledge to America” issued during last year’s midterm election campaign, which promised to roll back non-security discretionary spending to 2008 levels. That would have saved $100 billion compared with what the Obama administration had requested for this fiscal year, which ends Sept. 30.

Because the fiscal year is almost half over, Republicans are instead calling for setting spending levels at 2008 levels for its final seven months. The plan Ryan outlined would still leave total non-security discretionary spending $40 billion higher than it was in 2008.

Stopgap Funding

Ryan estimated the cuts would save $74 billion compared with what President Barack Obama had sought. Congress has since approved a stopgap measure funding the government that set spending below what Obama proposed; compared with those levels, were they to be extended through the fiscal year’s end on Sept. 30, the Republicans’ proposed cuts would be $32 billion.

Senate Budget Committee Chairman Kent Conrad, a North Dakota Democrat, said the Republicans’ scaled-back plans went too far, saying policymakers should only make “modest” cuts this year because the economy remains troubled. He said lawmakers instead should focus on bigger, longer-term reductions that wouldn’t take effect until the economy is on a surer footing.

‘Tough Choices’

In a statement, White House Budget Director Jack Lew said “this administration strongly agrees that tough choices must be made to bring down the deficit,” which “is why the president proposed a 5-year non-security discretionary freeze.” Still, Lew said, “we cannot make cuts that undermine our ability to create jobs, drive innovation and compete in a global economy -- all of which are critical to winning the future.”

Administration officials say the Obama spending freeze proposal announced last week would save $400 billion over the next decade. Republicans attacked it as inadequate.

The Republican proposal comes a week after the Congressional Budget Office said the deficit this year will widen to $1.5 trillion

Republicans didn’t say how the cuts would be divided up among the hundreds of government programs, leaving that to the House Appropriations Committee to sort out. Appropriations Chairman Harold Rogers, a Kentucky Republican, yesterday released instructions to his panel’s 12 subcommittees on how much in savings each must produce in general areas to meet Ryan’s numbers.

Floor Vote

Republicans aim to put legislation making the specific cuts to a floor vote the week of Feb. 14. The changes will be attached to a continuing resolution funding federal agencies through the rest of this fiscal year. The current stopgap measure expires March 4, and without action the government would shut down.

The battle over the Republican plan will be just one of this year’s fiscal fights, with separate showdowns looming on raising the national debt limit as well as Obama’s budget request for the 2012 fiscal year.

The plan outlined yesterday amounts to a rejection of calls by the Republican Study Committee, a bloc of self-described fiscal conservatives, for much deeper cuts. Representative Jim Jordan, an Ohio Republican who heads the RSC, will offer amendments making additional cuts once the legislation reaches the House floor, said spokesman Brian Straessle.

Ryan’s Authority

Republicans, aiming to mop up last year’s leftover budget business, adopted a rule last month allowing Ryan to unilaterally set the overall discretionary spending levels for the rest of this fiscal year. His plan would peg total appropriations at $1.055 trillion, compared with last year’s $1.091 trillion and the $1.128 trillion the administration had requested. The government’s total budget, including entitlements such as Medicare and Social Security, is $3.7 trillion.

Democrats who control the Senate today called upon Republican leaders in both chambers to explicitly rule out any shutdown of the government as negotiations on the budget proceed. “That’s playing with fire,” said Senator Charles Schumer of New York, the chamber’s No. 3 Democrat.

To contact the reporter on this story: Brian Faler in Washington at bfaler@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net

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