It's good that President Obama is trying to wring waste out of the US budget, say deficit hawks. But the $17 billion in cuts proposed by the administration on Thursday are small change in the context of $3.5 trillion in annual federal spending.
“I have a little bit of concern that by making a big deal out of these program cuts [Obama] doesn’t prepare the public for the really tough choices we need to make in the years ahead,” says Robert Bixby, executive director of the Concord Coalition, a group that promotes deficit-reduction.
Obama outlined his recommended $17 billion in savings at a time when he is attempting to rally the nation behind his economic policies and convince both voters and markets that he will be fiscally prudent in years to come.
On the chopping block
The 121 programs on his cut list ranged from the C-17 airlifter to early education efforts to federal programs that pay for the cleanup of abandoned mines.
The thread that connects all the targeted programs is that they no longer work, said administration officials. They are either outmoded, duplicated by other government efforts, or simply unnecessary.
Obama’s budget proposes spending $3.55 trillion in the fiscal year beginning in October. The fiscal 2010 deficit will be $1.17 trillion, the budget estimates, down from an estimated $1.75 trillion for the current fiscal year.
About half of the of the dollar value of the proposed $17 billion in savings would come from defense. Obama’s budget, for instance, would terminate a new long-range bomber slated for deployment in 2018. It would eliminate $465 billion earmarked for development of an alternative engine for the new Joint Strike Fighter (JSF).
Domestic cuts would include Loran-C, a long-range radio navigation system made obsolete by Global Positioning System receivers. Obama recommends eliminating a Department of Education attaché based in Paris, and he calls for a halt in payments to states for environmental work in abandoned mines that already have been cleaned up.
The White House is proposing to save $10 million by doing away with the Brownfields Economic Development Initiative, a Department of Housing and Urban Development program, because “local governments have access to other public and private funds that can address the same purposes,” according to an OMB analysis.
It also wants to eliminate the early childhood education program Even Start, because “three national evaluations show the program is not effective,” according to OMB.
If at first you don't succeed....
In general, the Obama administration appears to have gone after what might be called low-hanging fruit, say budget experts.
“In the program terminations there is nothing terribly surprising,” says James Horney, director of federal fiscal policy at the Center on Budget and Policy Priorities. “Their arguments seem to make sense.”
In some cases, they are arguments that have been made before, to no avail.
President Bush tried for years to zero out the JSF alternative engine, for instance, only to see it added back every time by members of Congress eager to protect jobs in their districts.
Obama’s willingness to try again to eliminate the alternative engine is “welcome,” said Tom Schatz, president of Citizens Against Government Waste, in a statement. But “it will be a tough nut to crack,” he said.
Many Republican lawmakers noted that Obama’s list of proposed cuts contained some items targeted in the past by Mr. Bush.
“While we appreciate the newfound attention to saving taxpayer dollars from this administration, we respectfully [suggest] that we should do far more,” said House minority leader John Boehner (R) of Ohio.
New priorities, not less spending
It’s important to note that Obama's cuts, if implemented, would not actually reduce government spending. The cash would be shifted to areas the administration rates as higher priorities.
Nor are extra jet engines and early education efforts the kinds of programs that “got the budget off track,” says Mr. Bixby of the Concord Coalition. “In a certain sense, these types of things are a distraction,” says Bixby, talking of the administration’s promotion of its proposed cuts.
The looming explosion of costs in entitlements, driven by healthcare inflation and the retirement of the baby boomers, is the real problem, he says.
That is something Obama officials say they fully recognize. Budget chief Orszag is an expert in healthcare costs and has long carried out something of a personal crusade to try to get Washington to bring them under control.
Seventeen billion dollars in proposed reductions is “real money,” said Orszag, adding, “This is an important first step but not the end of the process.”