U.S. House budget chief: automatic spending cuts "going to happen"

WASHINGTON (Reuters) - Automatic spending cuts postponed at the start of the year will go into effect as scheduled in March but "no one" is talking about allowing a U.S. government shutdown, the Republican House of Representatives Budget Committee chairman said on Sunday.

The automatic spending cuts had been delayed by two months as part of the deal to avoid the "fiscal cliff" of tax hikes and deep spending reductions - known as sequestration - that had loomed at the beginning of this month.

"I think the sequester is going to happen," Representative Paul Ryan, chairman of the House budget panel and the party's 2012 vice presidential nominee, told the NBC program "Meet The Press."

House Republicans, most of whom had strongly opposed any tax rate increases in the "fiscal cliff" debate, have now started to shift their focus away the issue of tax increases and toward the spending cuts.

"We think these sequesters will happen because the Democrats have opposed our efforts to replace those cuts with others and they've offered no alternative," Ryan said.

In the debate over how to get America's fiscal house in order, Democrats have argued for a combination of tax increases and public spending cuts. Republicans have favored spending cuts without higher taxes.

Some Republicans have called for delaying the planned spending cuts in defense while increasing cuts in other areas of the federal government. The Pentagon said on Friday it had begun laying off most of its 46,000 temporary and term employees and cutting maintenance on ships and aircraft in an effort to slow spending before nearly $50 billion in new cuts are due to go into effect on March 1.

Following a showdown over raising the U.S. debt ceiling in 2011, President Barack Obama and Congress agreed that $1.2 trillion in automatic cuts in domestic and military spending over 10 years would begin at the start of this year unless lawmakers took action to rein in spending. That was postponed until the beginning of March in the "fiscal cliff" deal.

Ryan said the automatic cuts would take place as scheduled because Democrats have not offered alternatives to Republican proposals for spending cuts.

STOP-GAP SPENDING

March 27 is the expiration date for a stop-gap government funding measure. If Congress does not authorize a new spending bill by that date, government agencies and programs would have to start shutting down. In such a scenario, military activities could be curtailed and federal employees put on unpaid leave.

While Republicans in the past have threatened similar shutdowns to press for spending cuts, the tactic could backfire. Republican-led government shutdowns in 1995 and 1996 met with strong public disapproval.

Ryan played down a potential fight with Democrats over the stop-gap spending measure.

"No one is talking about shutting the government down," Ryan said.

The House last Wednesday passed a Republican plan to allow the government to keep borrowing money through mid-May, clearing it for quick enactment after the top Senate Democrat and White House endorsed it.

The measure includes a measure requiring the House and Senate to pass a formal budget resolution by April 15. Under the provision, if either chamber fails to meet this deadline, lawmakers' pay would be suspended until they pass a budget.

The Democratic-controlled Senate is expected to pass it unchanged before sending it to the president.

Ryan also signaled little appetite for a renewed debate with Democrats on further tax increases after the "fiscal cliff" deal that included higher tax rates on the wealthiest Americans.

"We already offered that back in the 'fiscal cliff' negotiations," he said. "The president got his additional revenues. So that's behind us."

He said if Democrats keep raising taxes, it would weaken the likelihood Congress could accomplish "decent tax reform."

(Reporting by Margaret Chadbourn; Editing by Will Dunham)

Source: http://news.yahoo.com/u-house-budget-chief-automatic-spending-cuts-going-185521841--business.html

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