US Budget: Republicans for cuts

Republicans target foreign aid,education for cuts

Goolsbee says insane to link cuts to debt limit

With a struggle over raising the US debt limit expected to last through the summer,Republicans in the House of Representatives forged ahead with a spending plan for the coming fiscal year that points to another bruising struggle in the fall.

Republicans have pressed for deep spending cuts to get the country8217;s rapidly rising debt under control. They won the largest domestic spending cut in history last month in a battle that took the government to the brink of a shutdown.

An outline released by the House Appropriations Committee indicated they will press for further cuts in the coming fiscal year,which starts on Oct 1.

Education,foreign aid and other programs favored by Democrats would face steep cuts,while the Defense Department8217;s budget would see a 3 percent increase from last year.

Democrats who control the Senate are considering a budget plan of their own that would impose a surtax of 3 percent on millionaires,according to a congressional source.

Democrats say tax increases are needed to help keep the U.S. debt at a sustainable level,but Republicans say they are off the table in negotiations on cutting the U.S. deficit.

Even as the United States struggles to emerge from the deepest recession since the 1930s,the discussion in Washington has shifted from stimulus to austerity. The country is due on Monday to hit the congressionally set 14.3 trillion limit on how much it can borrow.

The Treasury Department says Congress must act by Aug. 2 to avoid a default that would cause turmoil in markets and economies across the globe.

Republicans and many Democrats say they will not back an increase in the country8217;s borrowing authority unless it is paired with steps to ensure the debt does not rise to an unsustainable level relative to the economy.

WHITE HOUSE LAUNCHES CHARM OFFENSIVE

The White House8217;s top economist,Austan Goolsbee,called that approach insane in a speech in Chicago.

Nevertheless,the White House has launched a charm offensive aimed at reaching common ground.

President Barack Obama met with Senate Democrats on Wednesday and is expected to meet with Senate Republicans on Thursday and House lawmakers from both parties,possibly next week. Vice President Joe Biden has separately been meeting with a smaller group of top lawmakers to see if a deal is possible.

We have been focused primarily in these first meetings on identifying those areas of common ground,said Democratic Representative Chris Van Hollen,a member of the Biden-led group. I think we8217;ve made some progress in that area,but obviously the bigger issues remain to be discussed.

Meanwhile,lawmakers must begin work on the 12 spending bills that keep the government running 8212; the subject of last month8217;s bruising budget battle.

The House Appropriations Committee8217;s outline merely sets the overall spending caps for those bills and does not indicate how individual programs would fare.

Nevertheless it shows sharp differences with Obama,who released his budget proposal back in February.

The Education Department,Labor Department and Health and Human Services Department would get 139 billion,23 percent less than Obama requested. Those agencies handle Democratic priorities like birth-control funding and college-tuition grants,which Republicans have previously targeted for reductions or elimination.

Foreign aid,the State Department and other foreign operations would get 22 percent less than Obama requested.

These funding levels are not final,and the House must reconcile its spending bills with those passed by the Senate before Obama can sign them into law.

They indicate Washington could see a replay of last year8217;s ugly budget battle,which kept government agencies in limbo for six months before a deal was reached in April.