Tue, Apr 05, 2011 - Page 7 News List

US lawmakers clash on where to slash spending

OUT OF CASH:Neither party wants to cause a government shutdown that could lead to thousands of layoffs when voters are nervous about the shaky economic recovery

Reuters, WASHINGTON

US lawmakers clashed on Sunday over where to slash spending to avoid next week’s potential government shutdown and over the Republicans’ budget plan for next year to cut more than US$4 trillion over the next decade.

The main author of the Republican proposal, expected to be unveiled today, said it would cap spending, lower corporate tax rates and change the federal Medicare and Medicaid health programs for the retired and the poor.

Democrats immediately criticized that effort, saying it extended tax breaks to millionaires and big oil companies and cut health programs for seniors. They predicted an even bigger political battle than the fight over this year’s budget that threatens a government shutdown.

For the rest of this year, Republicans and Democrats have tentatively agreed to US$33 billion in spending cuts, which would be the largest domestic spending reduction in US history, but lawmakers said they have yet to reach a deal on exactly what programs will be cut and by how much.

The US government runs out of cash when a short-term funding measure expires on Friday. US President Barack Obama told congressional leaders on Saturday that time was running short to agree on a deal to avoid a shutdown that would undermine economic growth.

Neither party wants to cause a government shutdown that could lead to thousands of layoffs when voters are already nervous about the shaky economic recovery and rising gas prices brought on by political unrest in the Middle East.

Several lawmakers said on televised Sunday talk shows they believed a shutdown could still be averted.

“We’ve agreed on a number. Let’s work to get that number done,” Senate Majority Leader Harry Reid said on CBS’ Face the Nation program, blaming the conservative Tea Party movement for standing in the way of a deal.

“The Republican leadership in the House [of Representatives] has to make a decision — whether it will do the right thing for the country or do the right thing for the Tea Party,” Reid said.

Senate Democratic Leader Dick Durbin said he would oppose any Republican effort to cut government spending this year for environmental regulation or birth control, so-called policy riders some Republicans want to add to a short-term deal.

“Some of the spending cuts suggested go way, way too far,” Durbin said on NBC’s Meet the Press.

Representative Paul Ryan, the main author of the Republican budget plan for next year, in an interview on Fox News Sunday said it would cut the deficit by more than US$4 trillion over 10 years and will exceed a presidential deficit commission’s goals.

“We’re looking at more than that right now,” Ryan, chairman of the House Budget Committee, said. “We’re fine tuning our numbers with the Congressional Budget Office literally today ... but we’re going to be cutting a lot more than that.”

However, Durbin, who is working with a small group of bipartisan senators on ways to cut the deficit, said he had problems with Ryan’s proposals.

“We’ll come at it differently,” he said, citing Pentagon cuts and requiring the wealthiest Americans to pay more in taxes rather than deep cuts in government social programs.

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