By Andy Sullivan

WASHINGTON (Reuters) - President Barack Obama's Democrats on Monday moved beyond their earlier proposals to cut U.S. spending in an attempt to revive stalled budget talks that would avert a government shutdown.

The latest White House plan would trim $20 billion from current spending, on top of the $10 billion that has already been cut from the current budget, Democratic aides said.

That would split the difference between their initial proposal to keep spending flat and a Republican plan that would cut $61 billion from the current fiscal year, which is nearly halfway over.

Republicans said they hadn't seen the plan yet, and pointed out that while the Republican plan has passed the House of Representatives, the Democratic-controlled Senate hasn't approved anything yet.

"The Senate needs to do its job and pass a bill," said Michael Steel, a spokesman for House Speaker John Boehner.

Negotiators have to find common ground on more than just a spending cut number as time runs short for a possible deal.

Tea Party-aligned Republicans hope to use the budget to prevent the government from spending money on a number of Obama initiatives, from the healthcare overhaul to greenhouse gas regulation. That's a nonstarter in the Democratic-controlled Senate.

Democrats want to cut benefit programs like crop subsidies that usually lie beyond the reach of the annual budget process, rather than reducing the amount of money available for discretionary programs like education and housing. Republicans say the debate should focus on discretionary spending.


A stopgap measure is keeping the government running through April 8, but aides say a deal needs to be in place by the middle of this week to ensure enough time to pass it through both chambers of Congress before the money stops flowing.

The government has been operating on a temporary extension of last year's budget since October 1 as Republicans try to keep a campaign promise to scale back government, while Democrats worry that deep cuts could hurt the economy.

A shutdown would force thousands of layoffs and rattle financial markets, though "essential services" like the military would keep functioning.

But the budget battle has already taken a toll on government agencies that have been handcuffed by the uncertainty and lack of authority to move ahead with new projects. Everything from airports and prisons to scientific research has felt the pinch.

The new Democratic proposal is roughly similar in size to a plan that Republican House leaders put forward a few months ago. But rank-and-file Republicans aligned with the grass-root Tea Party movement rejected that plan as inadequate, forcing through a proposal that would require immediate cuts of roughly 25 percent for domestic agencies.

Many Tea Party-aligned lawmakers have said they aren't willing to compromise, and the movement plans a Thursday rally in front of the Capitol.

Senate Democratic Leader Harry Reid said Boehner and other Republican leaders should stand up to the conservative wing.

"For the sake of our economy, it's time for mainstream Republicans to stand up to the Tea Party and rejoin Democrats at the table to negotiate a responsible solution that cuts spending while protecting jobs," Reid said in a statement.

Though the Republican plan would require dramatic cuts to everything from food safety to nuclear weapons monitoring, it would do little to reduce a budget deficit that is projected to hit $1.4 trillion this year.

That's because many programs use money from previous years. The Republican plan would lead to reduced government spending down the road but it would only lead to a spending reduction of $9 billion this year, according to the nonpartisan Congressional Budget Office.

(Additional reporting by Thomas Ferraro and Caren Bohan; Editing by Deborah Charles)