US Republicans set 2012 budget battle with Obama

Republicans in the US House of Representatives united on Friday behind a 2012 budget plan that would slash trillions of dollars in government spending while cutting taxes, setting the stage for acrimonious debt and deficit negotiations with President Barack Obama.

A House vote to pass a plan by Budget Committee Chairman Paul Ryan, a Republican, for fiscal 2012 was expected on Friday along mostly partisan lines in the Republican-controlled 435-member chamber.

The vote caps a week in which Obama belatedly entered the deficit debate with a partisan speech that hammered Ryan's proposal, and the US Congress finally agreed to fund the federal government for the rest of this fiscal year after down-to-the-wire haggling between Republicans and Democrats.

In the run-up to Friday vote, House Majority Leader Eric Cantor said Republicans were united on the plan that aims to stop a runaway national debt of nearly USD 14.3 trillion.

He said he expected to see a "resounding vote" of support for Ryan's plan, in stark contrast to Thursday, when dozens of of House Republicans abandoned their leadership by refusing to back the bill funding the government for the next five months.

The complained that the USD 38 billion in spending cuts included in the measure did not go far enough in addressing the United State's bloated deficit.

On Friday, Republican leaders were working to soothe those conservatives, many of whom won election last November on a promise to slash government spending.

"Yesterday we cut billions, today we cut trillions," said Kevin McCarthy, the third-ranking Republican in the House.

Reinforcing demands

While Obama and his fellow Democrats have vowed to block major elements of the Ryan 2012 budget - notably much higher healthcare costs down the road for the elderly - the House budget outline will nonetheless be important going forward:

It will help shape the 12 spending bills Republicans will write in coming weeks, likely opening new tensions with the White House. If left unresolved, those tensions could boil over later this year and bring the federal government to the brink of a shutdown, echoing a battle that was just fought over spending for this year.

More immediately, it reinforces Republican demands for more government spending cuts as their price for supporting raising the United States' debt ceiling in the next few weeks.

Obama acknowledged on Friday that a compromise on spending cuts would be needed to get the necessary support in Congress to raise the US debt ceiling, while warning that the world could plunge into a new recession if the United States were to default on its debt.

The divisive budget debate was already giving Obama and lawmakers from both parties the chance to test 2012 presidential and congressional election campaign themes.

"No matter what they say, the fact is the GOP (the Republican Party) wants to finance their tax breaks for millionaires and billionaires by hiking prescription drug prices for seniors," said Jon Summers, a spokesman for Senate Majority Leader Harry Reid.

House Speaker John Boehner countered that "It's pretty clear that if we don't make changes to these big programs (Medicare and Medicaid) that they won't exist." The Republican budget would preserve those programs for the poor and elderly for the long-haul, he said.