Trimming the Federal Fat, Part One
Updated 1:48 p.m. ET
President Obama holds his first full cabinet meeting today (without the still unconfirmed Kathleen Sebelius) to order spending cuts at each of the government agencies. The goal is to trim $100 million in the next 90 days, an impressive-sounding figure, but don't be fooled: The cuts announced today amount to just one quarter of one percent of federal spending for fiscal year 2009.
Much of the announced cuts seem like no-brainers -- mostly savings on travel, office equipment and redundancy. The Agriculture Department will move 1,500 employees from seven leased spaces into one facility by 2011, saving $62 million over a 15-year lease. The Education Department will trim $2 million by issuing most employees only one laptop computer, instead of also assigning them a desktop for their office. In a blow to the newspaper industry, the U.S. Attorneys and the U.S. Marshals Offices’ Asset Forfeiture program will stop publishing judicial forfeiture notices in print and will do so online only, saving $6.7 million over the first five years of the move.
But today's cuts are just the first part of a process that's expected to continue in the coming weeks, if Obama keeps to his announced intentions. During his Saturday radio/web address he said he will announce deeper cuts in the coming weeks leading to the elimination of "dozens of government programs shown to be wasteful or ineffective."
"In this effort, there will be no sacred cows, and no pet projects. All across America, families are making hard choices, and it’s time their government did the same."
The administration will cut "at least 100" programs, Obama said after his cabinet meeting. He also admitted that today's announced cuts are just a small portion of overall federal spending.
"None of these things alone are going to make a difference," he 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."
Expect plenty of protest from lawmakers, industry and public interest groups concerned about the elimination of programs near and dear to their hearts If and when those cuts are announced.
In the meantime, review the full list of today's announced cuts below, then leave your thoughts in the comments section.
Below are examples of some of the cost cutting measures agencies have begun to implement:
Improper Payments – USDA has worked with the Treasury Department to identify potential fraud and improper payments in farm programs. Beginning with the 2009 crop year and in successive years, all farm program payment recipients will be required to sign a form which grants the Treasury Department the authority to provide income information to USDA for verification purposes. The reform proposal would render those out of compliance ineligible for USDA payments. Savings under this proposal could reach $16 million a year.
Office Leases – USDA is working to combine 1,500 USDA employees from seven leased locations into a single facility in early 2011, saving $62 million over a 15-year lease term.
Training – The Rural Development office has been utilizing Internet training in place of in-person training with projected annual savings of $1.3 million.
Computer Consolidation – The Department has reduced the ratio of computers per employee requiring that most employees use laptop computers (as opposed to keeping a desktop and also receiving a laptop). This will result in annual savings of about $2 million. Additionally, savings from increasing the ratio of people who use a given printer will save an additional $6.7 million.
International Office Closure – Since August 2003, the Department has maintained a full-time employee acting as an education policy attaché at the U.S. Mission to UNESCO in Paris. By eliminating the position and closing the office, the Department will save $713,000 a year.
Office Supplies and Computer Software – DHS spends $100 million a year on office supplies, but virtually none of the supplies are purchased through agreements that leverage the Department’s collective buying power. DHS estimates that it could save up to $52 million over five years by purchasing in bulk for the Department. An additional $10 million over five years could be saved by procuring multi-purpose office equipment, such as a combined copier, printer, fax, and scanner all in a single unit, which will save space, reduce service costs, and lead to volume discounts. DHS agencies also purchase computer software independently, which increases greatly the number of software licenses that have to be acquired. Simply by buying these licenses as one entity, DHS estimates it can save $47 million a year.
Energy Efficiency – DHS will reduce its energy use by purchasing hybrid or alternative fuel vehicles. Where possible, the Department is also looking to use on-site renewable energy generation instead of grid power. It has set a target of saving $3 million a year in energy costs.
Branding – Since 2003, DHS has spent $3 million on consulting contracts to create new seals and logos for its components. The Department is putting an end to that.
Going Paperless – The U.S. Attorneys and the U.S. Marshals Offices’ Asset Forfeiture program is converting publication of judicial forfeiture notices from newspapers to the Internet. This change is expected to save $6.7 million over the first 5 years.
Going Paperless – The Department of State's National Visa Center (NVC) will implement electronic correspondence for immigrant visa processing. NVC anticipates cost savings in the first year of implementation will be approximately $1 million.
Consolidation in Posts – Consolidation in over 30 posts over the last few years have enabled USAID and State to save an estimated $5 million annually. The Department plans to expand consolidation to the 30 missions in USAID and State that will not be co-located by FY 2010 for an additional $5 million of savings.
Contract Consolidation – In a number of areas – including cell phones, PDAs, office supplies, furniture and medical supplies – the Department is reducing costs by consolidating purchases under one vendor or a small number of vendors, thus taking advantage of volume discounts. With office supplies alone, the Department anticipates cost savings between 7 and 10 percent.
Excess Inventory – In the past six months, the Bureau of Information Resource Management (IRM) has identified 15,000 obsolete items valued at $5 million from IRM’s inventory stock and has turned them in to the Department of Agriculture Centralized Excess Property Operation. This purge of equipment has freed up much needed warehouse space at a State Annex and will save tens of thousands of dollars in storage facility fees.
Recovery Act Savings – To promote efficiency, the Department has established a team of senior officials who work to bring Recovery Act projects in under budget. Across the country, contractor’s bids are coming in at 15 to 20 percent below the estimated costs. Colorado reports bids as much as 30 percent below estimates, and California indicates that some contractors are offering to do work at half the projected cost. These cost savings mean that more projects can be funded.
Travel Savings – The Department canceled or delayed 26 conferences for a savings of almost $17.8 million. VA will be relying on less costly alternatives, such as video conferencing, as ways to complete training requirements.
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