At His First Official Cabinet Meeting, Obama Orders Cuts
Search for Savings of $100 Million Derided by GOP as Drop in the Bucket

By Michael A. Fletcher
Washington Post Staff Writer
Tuesday, April 21, 2009

The brickbats were flying even before President Obama convened his first official Cabinet meeting yesterday. At the session, Obama ordered his agency heads to identify and shave a collective $100 million in administrative costs from federal programs in a budget of well over $3 trillion.

"At the same time they're looking for millions in savings, the president's budget calls for adding trillions to the debt," said Senate Minority Leader Mitch McConnell (R-Ky.). "The nation's debt is at its highest level ever, but under the administration's budget, the amount of public debt will double in five years and triple in 10."

Framed by members of his Cabinet, the president himself acknowledged that the goal amounts to a drop in the bucket. "It is, and that's what I just said," he told reporters. "None of these things alone are going to make a difference. But cumulatively they make an extraordinary difference because they start setting a tone. And so what we are going to do is, line by line, page by page, $100 million there, $100 million here, pretty soon, even in Washington, it adds up to real money."

In a frenetic first three months in office, Obama has seen his $787 billion economic stimulus plan enacted and the outlines of his $3.5 trillion budget passed, while overseeing hundreds of billions of dollars in outlays to stabilize the nation's teetering financial system and its imploding housing market.

But that may prove to be the easy part.

With Congress back from its spring recess and many of the big, expensive pieces of Obama's plan for turning the economy around now in place, the president is pivoting to the nitty-gritty details of implementing his plans to expand health care, encourage production of renewable energy and improve education -- all while demonstrating he is serious about cutting the federal deficit.

With that in mind, Obama called his first official meeting of the Cabinet, which for modern presidents serves as less a policymaking session than a forum for conveying presidential authority. This is particularly true for Obama, whose White House has multiple policymaking "czars" coordinating activities on issues from climate change to health care.

During his years in office, President George W. Bush was known for seeding his Cabinet with people who were personally close to him, while running policy mostly through the White House, leaving agencies as purveyors of those ideas. Obama, meanwhile, has assembled a governing team notable for its independence and star power, but until yesterday he had never met with its members officially as a group.

"The Cabinet is for pictures and stories and publicity," said Bradley H. Patterson Jr., who has worked for three administrations and has written several books on the inner workings of the White House.

Yesterday was such an occasion. Surrounded by the top administration officials, Obama said his team is aware of the need to cut spending over the long haul. "One of the things that everybody here is mindful of as we move forward, dealing with this extraordinary economic crisis, we also have a deficit, a confidence gap, when it comes to the American people," Obama said. "And we've got to earn their trust. They've got to feel confident that their dollars are being spent wisely."

As a start, the president set the $100 million goal for cutting administrative costs across the government. The White House said that process already has yielded some savings: The Department of Veterans Affairs canceled or delayed 26 conferences. The Education Department is no longer allowing employees to have both laptop and desktop computers. The Agriculture Department is terminating leases and doing more to verify the income of recipients of farm subsidies. And the Department of Homeland Security is going to start buying its office supplies in bulk.

The relatively small savings from those measures have drawn ridicule from Obama's conservative critics, many of whom have been critical of his spending plans.

"To put those numbers in perspective, imagine that the head of a household with annual spending of $100,000 called everyone in the family together to deal with a $34,000 budget shortfall," Harvard University economist N. Greg Mankiw, a Bush administration official, wrote on his blog. "How much would he or she announce that spending [be] cut? By $3 over the course of the year -- approximately the cost of one latte at Starbucks. The other $33,997? We can put that on the family credit card and worry about it next year."

Meanwhile, the administration is learning that those small savings will come easier than the larger ones officials are eyeing. Administration plans to have the government directly administer all federal students loans, cutting out banks and saving $94 billion over the next decade, have run into bipartisan opposition on Capitol Hill. Defense Secretary Robert M. Gates's blueprint to shift billions in defense spending has also met with a mixed reaction from lawmakers. Obama's proposal to end automatic subsidy payments for big farmers and capping subsidy payments at $250,000 has been derided by some farm state lawmakers.

Today, the Senate Finance Committee will hold the first of three roundtable discussions on improving health-care services and improving efficiency, another step in Democratic leaders' plans to pass a health-care reform bill by the summer. In the near future, the House committees will begin work on cap-and-trade proposals to reduce carbon emissions. And Congress will also be working to fill in details of Obama's budget outline.

All of this will come against a backdrop of opposition from Republicans, who accuse the president of spending too freely -- a perception Obama hopes to dash.

"None of these savings by themselves are going to solve our long-term fiscal problem," Obama said. "But taken together they can make a difference, and they send a signal that we are serious about changing how government operates."

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