Can the GOP deliver on promised budget cuts?

House Speaker John Boehner of Ohio (AP Photo/Pablo Martinez Monsivais, Pool)

One day after President Barack Obama presented Congress with his $3.7 trillion budget, the focus shifts on Tuesday to Washington’s more immediate spending needs and a controversial spending-cut bill that Republicans hope to pass in the House of Representatives.

The House legislation, cobbled together by Republicans after weeks of intraparty fighting, would cut about $61 billion from current spending in a bill to fund government activities through the rest of this fiscal year that ends on September 30.

The spending being proposed would be equal to a 14 percent cut from last year.

The House is expected to hold a freewheeling debate that will see conservatives pushing for even deeper spending cuts — reflecting the Tea Party presence in the new, Republican-controlled chamber — while moderates and liberals from both parties worry about the impact of the cuts.

Responding to those concerns, House Majority Whip Eric Cantor on Monday told reporters that the bill would simply pare back spending to 2008 levels.

“I think everybody remembers 2008,” Cantor said. “The sun rose and set in 2008… I think right now people understand we don’t have the money. You can’t keep spending money you don’t have.”

But Secretary of State Hillary Clinton was concerned enough about the Republican spending plan to travel to Capitol Hill, where she lunched with House Speaker John Boehner.

Following their meeting, Clinton told reporters that while the United States has tough fiscal problems, “The scope of the proposed House cuts is massive. The truth is that cuts of that level will be detrimental to America’s national security.”

The House Republicans’ bill would cut State Department and USAID budgets by some 16 percent this year compared to 2010 at a time when political uncertainty reins in the Mideast following Egyptian President Hosni Mubarak’s ouster.

Other government accounts that would face significant reductions under the House bill include popular education programs, USDA meat inspections, NASA space exploration and agriculture research.

Stop-gap funding for this year expires on March 4, giving Congress little time to work out a deal on spending for the rest of the year. As a result, another short stop-gap funding bill is likely while the House, Senate and Obama work out their differences on spending this year.

But with such a deep gap between Democrats and Republicans, there is a chance of failure, which could bring government shutdowns like ones last seen in 1995-96. Those brought immediate halts to many essential government operations and another round could throw financial markets into turmoil.

As the House debates the spending bill for the current fiscal year — with tough votes on passage anticipated by Thursday or Friday — the administration will begin defending Obama’s budget proposal for fiscal 2012 to skeptical congressional committees.

White House Budget Director Jack Lew and Treasury Secretary Timothy Geithner will be grilled by budget and tax-writing committees on Tuesday and continue their appearances through Thursday, along with other Obama Cabinet secretaries.

By April, the Republican-led House Budget Committee is expected to offer its budget blueprint that likely will be vastly different from the one Obama unveiled on Monday.

Still unclear is whether Obama and congressional Republicans will make a serious effort at a long-term fix to the U.S. deficit problem, which is forecast to be in the range of $1.48 trillion to $1.65 trillion just this year, or 9.8 percent to 10.9 percent of U.S. GDP.

Also thrown into the mix in coming weeks will be an attempt to raise U.S. borrowing authority before it is exhausted in April or May. Tea Party activists in the House and Senate are threatening to block that bill.

Copyright © 2011 Reuters

One Response to "Can the GOP deliver on promised budget cuts?"

  1. b mcclellan  February 16, 2011 at 12:22 am

    Neutered borrowing authority.
    In April or May, well worth considering as we ship ton after ton of scrap with expectations,
    they’ll buy that crap back vastly different.
    Whoops,.under the table,
    Washington is looking away.

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