Significant Cuts in Obama Budget, or Just a Little off the Top?

By Dan Balz
Friday, May 8, 2009

Restraint has not been the hallmark of President Obama's first budget. To attack the weak economy and to fulfill campaign promises on health care, energy and education, he has proposed spending and deficits on an unprecedented scale.

Obama has long insisted, however, that fiscal restraint is an integral part of his budgetary strategy, and yesterday he sought to prove that by releasing a list of 121 proposals that would cut a total of $17 billion from the 2010 budget.

They represent a minuscule down payment on a significantly larger problem. By themselves, the proposals are too small to impress his critics but probably too large for Congress to swallow. Obama will have to do much more to make good on his pledges to tame the deficits that will be left once the economy is solidly in recovery.

To date, the president's rhetoric about fiscal discipline exceeds his results. He has long said he would require his team to scrub the budget "line by line" for savings. Many of the reductions, while worthy, represent small change: $35 million to eliminate a long-range radio navigation system rendered obsolete by the availability of global positioning satellites; $632,000 to cut the educational attaché posted in Paris; $1 million for a fellowship program that delivers only 20 percent of its money to fellowships.

The biggest proposed cuts yesterday, which came in defense spending, were outlined earlier by Defense Secretary Robert Gates. Earlier, the president made a point of assembling the members of his Cabinet and ordering them to go back and look for other reductions, but the goal was only to find another $100 million, a pittance in a $3.4 trillion budget.

The president put the best face on his budget. "We can no longer afford to spend as if deficits do not matter and waste is not our problem," he said. "We can no longer afford to leave the hard choices for the next budget, the next administration, or the next generation."

White House Chief of Staff Rahm Emanuel went farther in a subsequent interview. The $17 billion in proposed cuts, he said, represents the equivalent of eliminating all congressional earmarks, a practice that has produced acres of critical coverage. "If earmarks can get that much space, why is $17 billion dismissed?" he asked.

Of course, as a candidate, Obama dismissed eliminating earmarks as a strategy for dealing with the deficit. But Emanuel said the $17 billion package represents but one piece of a much larger deficit-reduction puzzle. He pointed to the Senate's passage yesterday, by 93 to 0, of a defense procurement reform package (the House may follow soon). That, he said, could shave $100 billion or more from federal spending. There are other pieces that he said add up to an effective strategy to rein in spending.

"All of this is because of presidential focus," he said. "Also, the Congress knows the clock has run out on business as usual."

In reality, in the short term, deficits do not matter much to the administration. Obama's aides would say that's justifiable, given the scale of the economic recession that greeted this administration in January. It has decided to spend freely to jump-start the economy and to reduce the resulting deficits later.

But Senate Budget Committee Chairman Kent Conrad (D-N.D.), in a statement, underscored the real challenge for Obama if he is serious about attacking the deficit. While applauding administration efforts to scrub the budget for wasteful spending, Conrad said the same focus is needed to attack the long-term fiscal imbalance facing the country.

"As important as program terminations and cuts are, we should not lose sight of the far larger threat to our nation's finances -- the combination of the retiring baby boom generation, rising health care costs and our outdated and inefficient revenue system," he said.

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