Conservative groups keep up pressure amid U.S. budget talks

By Caren Bohan WASHINGTON (Reuters) - Influential U.S. conservative groups are lobbying Republican lawmakers on a bipartisan budget negotiating panel to stand firm in opposition to tax increases and any easing of automatic spending cuts known as the "sequester." Pressure from the outside groups could raise the chances of a stalemate in the panel's efforts to craft a deficit-reduction deal. The committee faces a December 13 deadline to agree on a plan designed in part to avoid a repeat of the September budget standoff that led to a 16-day government shutdown. Groups such as the Club for Growth, FreedomWorks and Heritage Action for America wield enormous clout with Tea Party-oriented Republicans. They were key players battling against compromise in last month's budget drama, pressuring House of Representatives Republicans to refuse to fund the government unless Democrats agreed to measures to weaken President Barack Obama's signature healthcare law known as "Obamacare." The 29-member budget negotiating committee, comprised of Republican and Democratic members from the House and Senate, was commissioned under a deal that ended the shutdown and prevented a possible default by the United States on its obligations. Among other things, the panel is considering ways to relieve the effects of automatic spending cuts, known as the "sequester," imposed on military and other government programs starting last year and continuing through 2021. In the absence of any broader deficit-reduction measures, many conservatives want to preserve the sequester as the only real cut of significance they've been able to achieve. "Yes, we're worried," said Andrew Roth, vice president of government affairs at the Club for Growth, which favors limited government. "We're always worried when they go behind closed doors and try and hatch something." "To us a bad deal is a deal that increases spending or taxes," said Dean Clancy, vice president of public policy at FreedomWorks, which advocates for low taxes and spending cuts. Although higher tax revenue is a key demand of Democrats on the panel, most Republicans on the budget panel have ruled it out. Among those opposed to new revenue is the lead Republican negotiator, Paul Ryan, who is chairman of the House of Representatives Budget Committee. "There's always a risk that they're going to do something like this," Roth said, referring to revenue increases but he said he didn't think such a deal would ever get approval in the Republican-led House of Representatives because most rank-and-file lawmakers staunchly oppose that. Clancy said he found it "troubling" that one Republican House member on the panel, Tom Cole of Oklahoma, told Bloomberg Television last month that he might be open to raising some revenue. "Mr. Cole's comments alarmed us because if he were to join with the House Democrats, they would have a majority for tax hikes." The disagreement between Democrats and Republicans over taxes is a huge stumbling block to any broader deal and could even stymie a smaller agreement. One of Democrats' main goals is to ease the impact of the across-the-board spending cuts that have forced cuts in programs ranging from early childhood education to food-safety inspections to scientific research to the military. Republicans have said they would be willing to reduce the size of the cuts in exchange for reductions in entitlements such as the Social Security retirement program and the Medicare health program for older Americans. Democrats say they would only support such cuts if they were accompanied by revenue increases. "I think expectations for the committee are extremely low," said Dan Holler, a spokesman for Heritage Action, which is the political arm of the conservative Heritage Foundation think tank. Holler said that with the congressional elections coming up in November 2014, he felt confident Republicans would want to avoid having their "fingerprints" on any kind of a tax increase. "Right now, it's just a bunch of conversations happening," Holler said. He said that for now, Heritage Action is keeping in close touch with lawmakers and their staff and will decide what position to take if and when the panel arrives at a recommendation. Clancy of FreedomWorks said his group was keeping in touch with Ryan and other members. "The grassroots feels cheated and betrayed by Republican leaders who have run on promises to cut spending and stop Obamacare but have proved unable to keep those promise and perhaps unwilling to," Clancy said. "So our expectations are low and pessimistic and that's why I say for us, no deal is better than a bad deal." (Reporting by Caren Bohan; editing by Fred Barbash and Jackie Frank)