Obama's proposed budget cuts don't add up to much

McClatchy NewspapersMay 7, 2009 

WASHINGTON — Once again, President Barack Obama has dramatically proposed budget cuts, but his reductions would trim less than half of 1 percent from his proposed $3.55 trillion fiscal 2010 budget

Obama unveiled a plan Thursday to cut or terminate 121 government programs and save $17 billion. Even if Congress goes along, however, his budget would double the national debt in a decade, and annual federal-budget deficits would approach $1 trillion a year on average, according to the Congressional Budget Office.

"This creates this veneer of fiscal responsibility when the budget is moving rapidly in the wrong direction,' said Robert Bixby, the executive director of the Concord Coalition, a nonpartisan budget watchdog group.

"A drop in the bucket," added Marc Goldwein, the policy director at the nonpartisan Committee for a Responsible Federal Budget.

Thursday's plan — which called for fewer program cuts and terminations than President George W. Bush sought a year ago _was the fourth time in Obama's three-month-old administration that he's pledged to promote fiscal responsibility.

Among his promises:

  • Earmarks. Obama has vowed to overhaul the system that governs congressional earmarks, or local projects that lawmakers insert into legislation. Congress has made some changes, but the fiscal 2009 spending bill that Congress approved in March still had about 8,500 earmarks worth $7.7 billion. Obama signed it into law.
  • Waste. The president told his Cabinet last month to find $100 million in wasteful spending to cut. Congress kept on spending; a week later, the House of Representatives voted to authorize $50 million to help protect cranes, wild African dogs and other endangered species.
  • Domestic spending. At his March 24 prime-time news conference, Obama boasted that he'd trim nondefense discretionary spending as a percentage of the gross domestic product to its lowest levels since the 1960s.
He neglected to say that his plan wouldn't reach that goal until 2019 — two years beyond his possible second term — and history shows that predictions on budgets 10 years in advance bear little resemblance to reality.

The administration's book of cuts and terminations comprises 121 programs, ranging from ending production of the F-22 fighter jet, which costs about $3.5 billion a year, to eliminating "local government climate-change grants," which the budget office said lack "focus" and which cost about $10 million.

Budget veterans recalled that such hit lists are as old as some of the programs themselves. President Ronald Reagan, who was elected in 1980 after railing against government bloat, quickly issued his own hit list, but after eight years in office, only four programs had been eliminated.

Bush tried year after year to make similar cuts and terminations. In 2006, after he'd been re-elected and was working with a Republican-led Congress, he had his greatest success, but still got changes in only 89 of the 154 programs he wanted pared.

In 2007 and 2008, facing a Democratic-dominated Congress, Bush sought changes in 141 programs each year, and won 44 changes the first year and 29 the second, according to a 2008 Bush administration budget-office report.

The bottom line: Obama's 121 targeted programs aren't what's driving up budget deficits.

"The president doesn't seem to want to touch the real problem" of health care and Social Security spending, said Rudolph Penner, a former Congressional Budget Office director who's now a senior fellow at Washington's Urban Institute.

"That's where the real money is," Goldwein added.

Obama conceded the point near the end of his remarks:

"We recognize that there remain looming challenges to our fiscal health . . . challenges that will require us to make health care more affordable and to work on a bipartisan basis to address programs like Social Security. So what we're proposing today does not replace the need for large changes in nondiscretionary spending.

"It is important, though, for all of you as you're writing up these stories to recognize that $17 billion taken out of our discretionary nondefense budget, as well as portions of our defense budget, are significant. They mean something."

White House Budget Director Peter Orszag offered a metaphor to symbolize the value.

"Just like a broken window has been shown to lead to increased crime because of the signal it sends, perpetuating inefficient programs with a shrug of the shoulders undermines confidence in government and wastes resources," Orszag said.

Fixing these broken budget windows, though, creates a potential political problem.

"A lot of the programs we're talking about are very small, but they are extremely important to a small number of people, who want to keep them in the budget," Bixby said.

That means a lot of little fights in Congress that could cost time and good will that the administration needs for bigger battles.

Obama acknowledged that, saying: "Now, none of this will be easy. For every dollar we seek to save there will be those who have an interest in seeing it spent."

So, are those 121 programs important enough to fight Congress over?

"We don't know," veteran Washington budget analyst Stan Collender said, "how hard they're really going to fight for these spending cuts."

ON THE WEB

White House budget terminations, reductions and savings

White House 2010 budget appendix

White House 2010 budget overview

President Obama's budget message

Bush administration's record on terminations, reductions and savings

House of Representatives Republican view of Obama's budget

Committee for a Responsible Federal Budget statement on Obama plan

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McClatchy Newspapers 2009

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