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House budget chairman says deeper cuts ahead

By Andy Sullivan

WASHINGTON (Reuters) - The Republican-led House of Representatives will push for spending cuts in the next fiscal year that will be even deeper than those they promised voters, the lawmaker leading the effort said on Thursday.

"If people think we're afraid of cutting $100 billion they've got another think coming," House Budget Committee Chairman Paul Ryan said. "That's just a down payment."

Ryan's comments come one day after he and other Republicans said they would not reach their target of $100 billion in cuts that would take effect as soon as March, prompting conservative complaints that they were not living up to their campaign promises.

Republicans had promised before the November elections to roll back federal spending to 2008 levels, which would mean a reduction of $100 billion from the $1.34 trillion budget President Barack Obama proposed last year.

Ryan said the initial cuts would only amount to $60 billion because the fiscal year will be nearly halfway through by the time current funding runs out in March. They also will need to cut less because the government is operating at a level at least $20 billion below the amount Obama sought.

But Ryan said he will push for far deeper cuts for fiscal 2012, which starts in October.

House Republicans will have a hard time seeing their proposed cuts actually take effect, as they would have to pass the Democratic-controlled Senate and then be signed into law by Obama.

Shortly after Ryan's remarks, the House voted 410 to 13 to slash its expenses, including salaries, by 5 percent over the next two years, a measure that would save $35 million.

But the substantial cuts needed to reach Republicans' goal may be harder to come by, as they could result in sharp cutbacks to domestic programs like education and job training while the country is struggling to emerge from the worst economic downturn in 70 years.

Republicans have said the cuts would fall in domestic areas, while the military, veterans and homeland security programs would be protected.

WHERE WILL THE AX FALL?

Ryan, who will outline the cuts in the coming weeks, declined to say which areas of the government would be hit hardest.

Republicans have promised to shrink budget deficits, which have hovered around 9 percent of GDP in recent years, to avoid a Greek-style debt crisis that would drive the government's borrowing costs to punitive levels.

But Democrats say that new rules passed by the House yesterday could blow a hole in the budget by making it easier to enact tax cuts without finding a way to pay for them.

The new rules would enable Republicans to widen the budget deficit by more than $1 trillion by the end of the decade, several Senate Democrats said at a news conference.

"These reckless fiscal policies are dead on arrival here in the Senate," Democratic Senator Charles Schumer said. "We're here to assure everyone, 'Don't worry. These plans won't happen because we're here, and we're responsible.'"

(Editing by Vicki Allen)

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