Obama’s $100-Million Savings Plan Equals 0.007 Percent of 2010 Deficit
April 20, 2009 - 8:05 PMPresident Barack Obama's plan to carve $100 million out of the budget equal 0.007 percent of the deficit spending that Obama's budget would incur in 2010.
Proposed measures included targeting fraud in farm subsidies, reducing the number of computers used by the Department of Education, buying in bulk, and purchasing hybrid vehicles to cut fuel costs for the Department of Homeland Security, according to a White House news release.
This comes after the Congressional Budget Office (CBO) projected last month that the “cumulative deficit from 2010 to 2019 under the president’s proposals would total $9.3 trillion, compared with a cumulative deficit of $4.4 trillion projected under the current-law assumptions embodied in CBO’s baseline.”
That would put the $100-million cost-savings at about 0.001 percent of the projected national deficit for the coming decade.
Even for 2009 and 2010, when the CBO projects deficits of $1.8 trillion and $1.4 trillion, respectively, $100 million would be 0.005 percent and 0.007 percent of the deficit in those years.
Obama said after the cabinet meeting that extraordinary measures must be taken to shore up the financial industry and acknowledged that $100 million was comparatively small.
“None of these things alone are going to make a difference,” the president said. “But cumulatively, they would make an extraordinary difference because they start setting a tone. And so what we're 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.”
Republican leaders on Capitol Hill are not buying into the proposed savings, which they say are dwarfed by massive spending increases in the proposed $3.5 trillion budget (for 2010) and the $787-billion recovery package that passed earlier this year.
The federal government is already set to spend $4 trillion by the end of fiscal year 2009, said House Minority Leader John Boehner (R-Ohio), citing a CBO report.
“The administration’s new talk of trimming a meager 0.0025 percent from the $4 trillion federal budget just doesn’t square with its reckless record on borrowing and spending,” Boehner said in a statement. “Washington Democrats have spent the past three months doling out more taxpayer dollars than every previous president combined, and the administration is clearly feeling the heat.”
Boehner said the administration should target projects, such as a skateboard park in Rhode Island and bike racks in Washington, D.C., that were funded by federal dollars in the stimulus bill. He also mentioned last week that “hundreds of thousands of Americans participated in Taxpayer Tea Parties to say they’ve had enough of Washington piling more debt on our children and grandchildren.”
The president praised the cabinet for its efforts and said secretaries will have to report back with savings in 90 days. He singled out Defense Secretary Robert Gates for praise for having already proposed numerous cuts in the military budget.
“There are a host of efficiencies that can be gained without increasing our personnel or our budget, but rather decreasing the amount of money that’s spent on unnecessary things in order to fund some of the critical initiatives that we’ve all talked about,” Obama continued.
“Obviously, Bob Gates just came out with a historic budget proposal with respect to the Pentagon, and we expect to follow up with significant procurement reform that's going to make an enormous difference,” he said.
Obama has proposed a $3.5 trillion federal budget to Congress that includes many of his priorities regarding expanding health care coverage and environmental protection. This comes after the passage of the $787 billion economic stimulus package.
Still, Obama has consistently promised greater fiscal responsibility than the previous administration. The CBO projects that deficits will reach $9.3 trillion by 2019.
The White House is already citing several examples being targeted for cuts or consolidation. The Department of Agriculture (USDA) estimates saving $16 million by identifying “potential fraud and improper payments in farm programs.”
Further, the USDA will consolidate its 1,500 employees working at leased locations into a single office by 2011, with expected savings of $62 million over a 15-year-lease term.
The Department of Education is supposed to save an extra $2 million per year by requiring most employees to use a laptop computer instead of furnishing employees with a desktop and a laptop.
The Department of Homeland Security, where “virtually none of the supplies are purchased through agreements that leverage the department’s collective buying power” plans to save $52 million over five years by more bulk purchases. Also, “purchasing hybrid and alternative fuel vehicles” will save the DHS up to $3 million in annual energy costs, the White House says.
In other examples, the Justice Department and the State Department plan to go paperless on more programs. The Department of Veterans Affairs plans to have fewer conferences, and the Department of Transportation has set up a committee to work on getting more projects funded by the stimulus package under their initially estimated costs.
Like Boehner in the House of Representatives, Senate Minority Leader Mitch McConnell (R-Ky.) also viewed the White House announcement as little more than a political gesture, considering that $100 million is about how much the government will pay in interest per day over the next 10 years on just the stimulus bill.
“I appreciate the efforts to save millions by identifying unnecessary or duplicative government spending,” McConnell said in a statement. “But let’s not forget that at the same time they’re looking for millions in savings, the president’s budget calls for adding trillions to the debt. The nation’s debt is at its highest level ever, but under the administration’s budget, the amount will double in five years and triple in 10.”