Obama's Budget Knife Yields Modest Trims
Plan Likely to Face Tough Fight on the Hill

By Lori Montgomery and Amy Goldstein
Washington Post Staff Writers
Thursday, May 7, 2009

President Obama has said for weeks that his staff is scouring the federal budget, "line by line," for savings. Today, they will release the results: a plan to trim 121 programs by $17 billion, a tiny fraction of next year's $3.4 trillion budget.

The plan is less ambitious than the hit list former president George W. Bush produced last year, targeting 151 programs for $34 billion in savings. And like most of the cuts Bush sought, congressional sources and independent budget analysts yesterday predicted that Obama's, too, would be a tough sell.

"Even if you got all of those things, it would be saving pennies, not dollars. And you're not going to begin to get all of them," said Isabel Sawhill, a Brookings Institution economist who waged her own battles with Congress as a senior official in the Clinton White House budget office. "This is a good government exercise without much prospect of putting a significant dent in spending."

Administration officials defended their approach, saying the list of program reductions and terminations is just the start of a broader effort to cut spending and rein in a skyrocketing budget deficit, which is projected to approach $1.7 trillion this year. They also noted that the list does not include more than $300 billion in savings Obama proposes to squeeze from federal health programs and use to finance an expansion of coverage for the uninsured.

"This is an important first step, but it's not the end of the process. We will continue to look for additional savings," said a senior administration official, speaking on condition of anonymity because the list of cuts had not been officially released. "You have not heard everything to be said on this topic from us."

The president has already scored a victory on the budget. Congress last week decisively approved his request to devote billions of dollars in new spending to health care, energy and education in the fiscal year that begins in October. But that plan depends in part on the administration's ability to identify budget cuts elsewhere. The document being released today details some of those savings.

The relatively short list of proposed program cuts quickly drew fire from Republicans who learned of them yesterday.

"While we appreciate the newfound attention to saving taxpayer dollars from this administration, we respectfully suggest that we should do far more," House Minority Leader John A. Boehner (R-Ohio) said.

Full details of the proposed cuts will not be released until this morning. But in separate briefings with congressional Democrats and reporters, administration officials said the proposed savings were evenly split between defense and nondefense programs, and that many of the most significant reductions had already been revealed by the president or by Defense Secretary Robert M. Gates.

They also said the majority of the reductions were new targets not previously identified by the Bush administration. But the two lists clearly have some overlap.

For example, congressional sources said Obama is proposing to eliminate a program that reimburses states and localities for holding suspected criminals who turn out to be in the country illegally. Created in 1994, the program was repeatedly targeted by Bush officials, who argued that it is ineffective. But Congress restored funding for the program because it was popular with state and local officials. The program handed out $400 million last year.

Administration officials said Obama also wants to do away with Even Start, a program created in the late 1980s to promote literacy for young children and their parents. Starting in 2005, Bush tried annually to persuade Congress to eliminate the program. Lawmakers gradually reduced funding from $247 million to $66 million, but never proved willing to eliminate it.

Yesterday, an administration official said that, though Obama considers early childhood education a priority, "The evidence is unfortunately clear that this specific early childhood program does not work very well."

The officials previewed four other programs marked for termination on the grounds that they are not needed or are not effective. Obama officials have previously identified three of them as being out of favor: a $35 million-a-year long-range radio navigation system that officials said has been made obsolete by Global Positioning System devices; a Department of Education attache based in Paris that costs $632,000 per year; and a $142 million program that officials said continues to pay states to clean up abandoned mines even though that task has been completed.

In addition, the White House is proposing to cancel the Christopher Columbus Fellowship Foundation, an independent federal agency established to "encourage and support research, study and labor designed to produce new discoveries in all fields of endeavor for the benefit of mankind," according to its Web site. The program costs $1 million a year, and officials said 80 percent goes to administrative overhead.

The proposed cuts, if adopted by Congress, would not actually reduce government spending. Obama's budget would increase overall spending; any savings from the program terminations and reductions would be shifted to the president's priorities.

But the more likely outcome, budget analysts said, is that few to none of the programs targeted by Obama will be terminated. Presidents from both parties have routinely rolled out long lists of spending cuts -- and lawmakers from both parties routinely ignore them.

"You can go through the budget line by line, but there's no line that says 'waste, fraud and abuse,'" said Robert Bixby, executive director of the nonprofit Concord Coalition, which promotes deficit reduction. "What some people think is waste, other people think is a vital government service."

The administration officials said they think their cuts will be taken more seriously by lawmakers because the economic crisis and the accompanying rise in deficit spending is focusing fresh attention on the need to trim spending. House Speaker Nancy Pelosi (D-Calif.) has told committee leaders to offer their own spending cuts by the beginning of June.

"The spirit on Capitol Hill is now cognizant of the need to find some efficiencies," the administration official said. "I think you're going to see proposals not just from us, but from lawmakers to find savings."

Still, in the context of an enormous deficit, the sums under discussion are a drop in the bucket, analysts said.

"Obviously, the bottom line is frightening," said Rudolph Penner, a senior fellow at the Urban Institute and a former director of the Congressional Budget Office. "They have a long way to go to show fiscal restraint."

Staff writer Spencer Hsu contributed to this report.

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