House Republicans Seek New Budget Cuts, Reviving Shutdown Threat

House Republicans are pushing for a new round of budget cuts this year, congressional aides said, raising the possibility of a government shutdown shortly before the November election.

Party leaders are considering seeking another $19 billion in cuts in so-called discretionary spending for the fiscal year that begins Oct. 1, said two Republican congressional aides who weren’t authorized to speak publicly.

It would be a compromise between party conservatives and moderates who have buffeted House Speaker John Boehner, an Ohio Republican, with competing demands on budget cuts. Failure to agree on a budget would be an embarrassment after Republicans lambasted Senate Democrats for announcing this year they won’t pass one. House Republicans plan to release their tax-and- spending plan next week.

Democrats say a fresh round of cuts would amount to reneging on a deal lawmakers in both parties reached last August, during a year in which budget disputes brought the government to the brink of a shutdown four times. Both sides must agree on a spending plan to keep the government running after Sept. 30.

“I guess they love government shutdowns or at least the threat of them,” Senate Majority Leader Harry Reid, a Nevada Democrat, told reporters. “Our economy cannot afford another one of these senseless demonstrations by the Tea Party. The American people are sick of these manufactured crises.”

Discretionary Spending

Republicans rejected complaints that additional cuts would amount to breaking last year’s agreement that capped discretionary spending.

“The spending limit is only broken if exceeded,” said Michael Steel, a spokesman for Boehner. “Spending less not only satisfies the agreement struck last summer, but means we’re borrowing less from places like China.”

The August agreement capped spending and also required automatic cuts in defense and non-defense discretionary spending if a budget-cutting supercommittee didn’t agree on a deficit- reduction plan. The panel’s talks failed, so $1 trillion in automatic spending reductions will begin taking effect in January 2013.

House Budget Committee Chairman Paul Ryan said, “It is difficult to take Senator Reid’s comments seriously” when Democrats don’t plan to pass a budget.

Ryan, in a statement yesterday, said Republicans are trying to “reprioritize” the spending cuts “because our troops and military families shouldn’t pay the price for Washington’s failure to take action.”

Republican Study Committee

A proposal to cut an additional $19 billion would be aimed at resolving a dispute between a group of self-described conservatives known as the Republican Study Committee, which had sought larger cuts, and more moderate Republicans who said those cuts would be so large as to be unworkable.

Representative Tim Huelskamp, a freshman member of the Republican Study Committee, said he is open to a compromise, though his support will depend on other questions such as how quickly the budget would erase the deficit. He expressed confidence Republicans will agree on a plan.

“We’ll come to a deal,” Huelskamp said in an interview. “It would be quite a failure of leadership in general if we didn’t have one, so we’re all committed to passing one.”

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

To contact the editor responsible for this story: Jodi Schneider at jschneider50@bloomberg.net

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