Ryan: We'll See If Obama Uses the Sequester Flexibility We Plan to Give Him

By Susan Jones | March 1, 2013 | 6:20 AM EST

In this April 5, 2011 file photo, House Budget Committee Chairman Paul Ryan, R-Wis., touts his 2012 federal budget. (AP Photo/J. Scott Applewhite, File)

(CNSNews.com) - Rep. Paul Ryan (R-Wis.), chairman of the House Budget Committee, says he expects the House to pass a measure next week that will give the Obama administration more flexibility in making the spending reductions required under sequestration.

"So I think you'll see more flexibility for the military, for national security, and more flexibility for domestic spending so that the president and the agencies can go after waste and inefficiency as the sequester takes place," Ryan told CNBC's "Squawk Box" on Thursday.

"We're going to give the administration the flexibility they need to...go after the waste, the fraud, the abuse, low-priority spending. If they choose not to do that, then the president will have made the choice to do the things you just described (layoffs, airport delays, fewer meat inspections) for political benefit. We think that's wrong. We'll see if he does that.

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"But the fact is...we can't keep spending money we just don't have. We have got to get this deficit and debt under control, not because we just like numbers adding up; it's because that's necessary for growth, for a healthy economy, for job creation, for prosperity."

Transfer authority, as it is called, would allow the administration to make spending reductions in less important accounts, rather than making indiscriminate, across-the-board cuts that affect vital services.

But in a speech on Tuesday, President Obama indicated he doesn't want flexibility. He's been traveling around the country, warning Americans about the sequester's dire consequences -- all of it an attempt to pressure Congress to raise more tax revenue.

Obama believes the more pain the sequester causes the American people, the more likely they are to demand that Congress give in to the president on taxes.

In Newport News on Tuesday, Obama mentioned that "some people have been saying, well, maybe we'll just give the President some flexibility. He could make the cuts the way he wants and that way it won't be as damaging. The problem is, when you're cutting $85 billion in seven months, which represents over a 10-percent cut in the defense budget in seven months, there's no smart way to do that... You don't want to have to choose between, let's see, do I close funding for the disabled kid, or the poor kid? Do I close this Navy shipyard or some other one? When you're doing things in a way that's not smart, you can't gloss over the pain and the impact it's going to have on the economy."

In that same speech, Obama insisted the nation can't "just cut our way to prosperity" while "asking nothing more from the wealthiest and most powerful."

But Ryan on Thursday noted that Republicans gave President Obama "the largest tax increase in American history eight weeks ago. Now he's trying to move the goalposts and say instead of spending cuts, which is what the sequester is, I need a bunch of tax increases for this as well to fuel more spending."

Ryan says spending is the problem, and reductions in spending must happen: "Do we believe that the government, which spends $3.5 trillion this year, can do with $85 billion less? Yes," Ryan said. "Do we believe that a government that spends more than $100 billion a year in what we call improper payments, money that shouldn't even be spent, can go after waste and inefficiency without raising taxes? Yes, we believe that."

Ryan said Republicans are "not going to walk away from the only chance of getting spending under control around here. When push comes to shove, we'll see if the administration uses the flexibility or not. And if they choose not to do so, then I would just basically say the president's still out there campaigning, trying to maximize political benefit for his ends instead of coming here, getting solutions."

Republicans plan to discuss tax loopholes later, as part of a larger tax-reform effort. The revenue raised by closing certain loopholes would be used to pay for tax reform -- not for more government spending.