Dan Balz's Take
Small Cuts Will Do Little to Tame Deficit
By Dan Balz
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 today 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 modest down payment on a significantly larger problem. The proposals are too small to impress his critics (or reduce deficits significantly) but possibly 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 exceeds his results. He has long said he would require his team to scrub the budget "line by line" for savings. Today's release is the product of that review, though an administration official was careful to call it "only a step in the process" of dealing with the deficit problem.
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.
Earlier he made a point of assembling 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 $3.5 trillion budget. The biggest cuts in today's package, which come in defense, were outlined earlier by Defense Secretary Robert Gates.
The president put the best face on today's budget. "We can no longer afford to spend as if deficits do not matter and waste is not our problem," he said in his formal remarks. "We can no longer afford to leave the hard choices for the next budget, the next administration, or the next generation."
In reality, in the short term, deficits do not matter much to the administration. His aides would say that's justifiable given the scale of the economic recession that greeted them in January. They have decided to spend freely to jumpstart the economy and to reduce the resulting deficits later.
An attack on government waste, as necessary as that may be, cannot solve the problems he is helping to create. Administration officials insisted that $17 billion in cuts in one budget is a significant accomplishment and that they will redouble efforts in future budgets to keep paring away.
Senate Budget Committee Chairman Kent Conrad, in a statement this morning, underscored the real challenge for Obama if he is serious about attacking the deficit. While applauding the efforts of the administration to scrub the budget for possible cuts, he 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.
Obama has signaled his intention to tackle those problems at some point. His budget already proposes changes in Medicare to rein in that program, but those savings would be used to offset the cost of expanding health care coverage, not to reduce the deficit. What more he's prepared to do on Medicare, Medicaid and Social Security -- and whether he can win support for real entitlement reform -- isn't yet known.
The administration faces resistance from two directions. Congress has frustrated numerous administrations that have sought to trim obsolete programs. There's no reason to expect a different outcome now. As House Budget Committee Chairman John Spratt (D-S.C.) said in his statement today, "While the Congress is unlikely to agree with all the changes proposed by the Administration, the process and the resulting proposals are a step in the right direction, and a sign of fiscal discipline."
The other resistance comes from Democratic constituencies -- and lawmakers -- who have any number of ideas for spending more money. Obama ran into this during the fight over his stimulus package, which despite its enormous size was not big enough to accommodate all the things Democrats wanted to do. Those initiatives will be back.
Administration officials are insistent that they have made tough choices. A very senior official recently told several Post reporters that agency officials went through very difficult negotiations with OMB over the size of their budgets and were often frustrated by the hard line laid down by the president and OMB. What he meant was that the agencies had many more spending requests than they were granted.
That acknowledgment, that constraining the agencies rather than forcing even bigger cuts represented a real accomplishment, underscores why Obama's desire to bring more discipline to the budgetary process will require constant attention and a bigger strategy.
At a time when the public generally supports Obama's economic initiatives, there is some concern over the size of the deficits his policies are creating. The most recent Washington Post-ABC News poll showed that only 51 percent of the public approved of his handling of the deficit. Among independents, who are critical to maintaining Obama's political standing, not quite half approve of his handling of the deficit.
That's little more than an early warning sign for Obama, who has more immediate economic problems to solve. But administrations often find that other priorities are more important than dealing with the deficit. Obama has continued to talk about his commitment to doing so. Today's budget is a reminder of how difficult it will be to make good on his promise.
Posted at 1:08 PM ET on May 7, 2009
Dan Balz's Take
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