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U.S. Republicans to keep cuts if budget talks fail: Boehner

U.S. House Speaker John Boehner (R-OH) calls on a reporter during a news conference at the Republican National Committee offices on Capitol
U.S. House Speaker John Boehner (R-OH) calls on a reporter during a news conference at the Republican National Committee offices on Capitol

By David Lawder

WASHINGTON (Reuters) - Republicans in the U.S. House of Representatives will pursue a stopgap government funding bill that keeps "sequester" automatic spending cuts in place if congressional negotiators fail to reach a budget deal, U.S. House Speaker John Boehner said on Thursday.

Boehner told reporters that he hopes budget talks led by Republican Representative Paul Ryan and Democratic Senator Patty Murray can produce a deal that sets spending levels for fiscal 2014.

"I'm hopeful, but if not, the House will be prepared to move" a 2014 spending bill at levels specified by the Budget Control Act, Boehner said.

That level, after the next round of sequester cuts hits in January, is $967 billion for discretionary programs and agencies ranging from the military to education - the lowest in a decade.

Democrats argued that Republicans will have difficulty passing such a lean funding extension, especially because it would mean deeper cuts to military programs that many Republicans favor.

Republicans on the House Appropriations Committee earlier this week urged a deal that addresses the sequester cuts for two years.

The sequester in January "would result in more indiscriminate, across the board reductions that could have negative consequences on critically important federal programs, especially our national defense," Appropriations Committee Chairman Hal Rogers and 12 Republican subcommittee chairs wrote in a letter to Ryan and Murray on Monday.

Earlier this year, Boehner withdrew a transportation and housing spending bill that was drastically reduced by the 2014 sequester cuts because it could not muster enough Republican votes for passage.

Democratic Representative Chris Van Hollen, a member of the budget negotiating panel, said by keeping the $967 billion figure in place, Republicans would be "supporting an additional $20 billion cut to defense spending compared to this year. They would be making the choice of cutting defense over cutting special interest tax breaks."

NO SPECIFIC PROPOSAL YET

Van Hollen expressed doubt that the panel can reach agreement quickly. He said Ryan and Murray had discussed areas where they may find common ground, such as the need for a two-year deal, but Democrats have yet to see a specific proposal from Ryan, who chairs the panel.

"You can be involved in a good discussion, but a good discussion does not equal negotiation and willingness to compromise," the Maryland Democrat told reporters. "We need to step on the gas in a big way."

Democrats are still campaigning for easing the sequester cuts partly with revenue from the closure of tax deductions and credits that benefit the wealthy and large corporations.

Party leaders also on Thursday said that they want any deal to include an extension of long-term unemployment benefits. These expire at the end of this year, potentially cutting off benefits for 1.3 million jobless Americans.

Republicans have refused to consider tax increases as part of any budget solution and say any reduction in sequester cuts should shifted to reductions in federal benefits programs such as the Social Security pension system or the Medicare and Medicaid healthcare programs.

The talks have included discussions of increasing some non-tax user fees, such as those the Transportation Security Administration charges passengers at airports, Van Hollen said.

"We're just a little perplexed that our Republican colleagues think it's a better idea to raise TSA fees on the American public than close a tax loophole that actually creates incentives for American companies to move their profits to places like the Cayman Islands," he added.

The budget panel is working against a December 13 deadline for a deal that can pass both the House and Senate in time to avoid another government shutdown when spending authority expires again on January 15.

(Reporting by Caren Bohan; Editing by Vicki Allen and Cynthia Osterman)

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