May 12 (Bloomberg) -- A group of U.S. House Republicans is proposing spending reductions that would cut the federal deficit in half in one year.
The Republican Study Committee, a group of self-described fiscal conservatives, is circulating a letter asking House Speaker John Boehner to back a plan that would reduce spending by about $380 billion in fiscal 2012 in exchange for a vote to approve in increase in the statutory debt limit.
“If you’re going to increase the borrowing authority, you’ve got to deal with spending,” said Representative Jim Jordan, an Ohio Republican and chairman of the study committee who said he is seeking signatures on the letter. “We actually think you’ve got to do something big in 2012.”
The proposal is one of several circulating among Republicans who are using the prospect of crashing into the $14.3 trillion debt ceiling to extract spending cuts from Democrats. Treasury Secretary Timothy Geithner has said lawmakers must raise the limit before Aug. 2 or risk a default.
Jordan said lawmakers could reach the spending-cut goal by freezing discretionary spending at 2008 levels and cutting social welfare programs other than Social Security, Medicare and Medicaid.
The group would also seek to cap government spending at 18 percent of gross domestic product and implement a balanced budget constitutional amendment over the long term.
The 175 members of the Republican Study Committee are debating whether the debt ceiling should be increased by a large enough amount to carry the government through the 2012 election, or whether to force multiple votes by extending the limit by incremental amounts and gaining spending concessions with each vote.
“There is a proposal to do a $2 trillion one that gets you through to the end of the election,” said New Jersey Republican Scott Garrett in an interview. “There’s an option that gets you just until Oct. 1, and there’s monthly until October.”
“Getting us to October is doable,” he said.
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