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White House issues veto threat over House spending levels

WASHINGTON (Reuters) - Setting up a new fiscal showdown with Congress, the White House issued a veto threat on Monday for any spending bill that attempts to implement "draconian" budget cuts prescribed by Republicans in the House of Representatives.

The White House budget office said it recommended President Barack Obama veto two appropriations bills set for House consideration this week "unless they are passed in the context of an overall budget framework that supports our recovery and enables sufficient investments in education, infrastructure, innovation and national security."

The budget office said the $967 billion discretionary spending cap set forth in the House Republican budget, the lowest in a decade, was simply too low and that the same veto threat applied to any bill that tries to implement it.

Passing the two House bills "while adhering to the overall spending limits in the House Budget's topline discretionary level for fiscal year (FY) 2014, would hurt our economy and require draconian cuts to middle-class priorities," the Office of Management and Budget said in a statement.

The budget office said it would recommend Obama veto the bills "and any other legislation that implements the House Republican Budget framework."

The appropriations bills for the Department of Homeland Security and for military construction projects and the Veterans Administration conform to sharply reduced spending levels set by House Republicans that assume continuation of the "sequester" automatic spending cuts into the 2014 fiscal year, which starts on October 1.

The Republican approach, devised by House Budget Committee Chairman Paul Ryan, is at odds with that in the Democratic-controlled Senate, which is aiming to pass spending bills written to the $1.058 trillion level set forth in a 2011 budget deal.

The Democratic approach assumes that $109 billion in the across-the-board sequester cuts are replaced with savings elsewhere as part of a broader budget deal. Republicans have been willing to accept a continuation of the cuts and are trying to shift funds away from some domestic and social programs to better fund their priorities of defense and security.

With the deadline for an increase in the federal borrowing limit now pushed back to the fall, the impetus for Congress to strike a budget deal this summer has faded. But the need for passage of new spending bills by October 1 to avoid a government shutdown could put new pressure on Congress to resolve the dispute over spending levels and deficit reduction.

(Reporting By David Lawder; Editing by Peter Cooney)

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