Friday, May 8, 2009

President Obama has targeted the Department of Defense to absorb more than 80 percent of the cuts he has proposed in next year’s budget for discretionary programs.

In its “Terminations, Reductions and Savings” booklet, which the administration released Thursday, the White House highlighted the results of the president’s line-by-line scrubbing of the federal budget.

The administration identified $11.5 billion in discretionary program terminations and reductions for next year. The Defense Department will take a $9.4 billion hit, constituting 82 percent of the cuts. Defense accounts for 49 percent of spending on discretionary programs, which Congress must fund each year.

The White House identified a total of $17 billion in spending cuts, including cuts in mandatory programs that mostly involve entitlements.

“We can no longer afford to spend as if deficits do not matter and waste is not our problem,” Mr. Obama said.

“These savings, large and small, add up,” the president said. “None of this will be easy.”

The $17 billion in total cuts represents less than one-half of 1 percent of the $3.6 trillion 2010 budget the president proposed in February, and it is less than 1 percent of this year’s budget deficit.

While defense spending accounts for 19 percent of the federal budget, it would absorb 55 percent of $17 billion in total cuts.

The defense cuts send “a very clear signal that this administration is not going to be as forceful on national security issues as the previous administration. I think that’s pretty clear,” said Sen. Saxby Chambliss, Georgia Republican.

White House Budget Director Peter R. Orszag rejected the notion that defense was asked to absorb a disproportionate share of the cuts. “Defense spending will increase by 4 percent in 2010,” Mr. Orszag said. Defense Secretary Robert M. Gates, whom Mr. Obama retained from President Bush’s Cabinet, “has said the defense budget needs reform,” Mr. Orszag added.

“But that doesn’t answer why the president did not use the same diligence in cutting spending for the rest of the budget” that he used to cut defense, said Brian Riedl, a budget analyst at the conservative Heritage Foundation. Mr. Riedl noted that the total savings of $17 billion, even in the unlikely event that Congress approved the cuts, “would not reduce spending at all. Because of budget rules, all savings would be re-shifted to other programs.”

For mandatory programs, which are dominated by entitlements like Social Security and Medicare, the president has proposed $4 billion in funding terminations next year, 90 percent of which would apply to the student-loan program.

However, eliminating “unnecessary subsidies” to lenders that make loans to students would not result in any spending savings over the next decade. “This proposal will save more than $4 billion annually that will be used to provide Pell Grants to students,” the booklet revealed. In fact, the Pell Grant program itself would become an entitlement akin to Social Security and Medicare.

The administration is requesting $130 billion for “overseas contingency operations” in fiscal 2010, including $65 billion for Afghanistan and $61 billion for Iraq. A Pentagon summary said the $130 billion represented the “administration’s best estimate of needs at this time,” adding that a request for more funding could come later.

When Congress passed its budget resolution last month, the biggest savings it achieved, compared with Mr. Obama’s February blueprint, was the elimination of the $250 billion “place holder” the administration requested for the potential purchase of toxic assets from banks. “Our hope is that it will not be necessary to call upon it,” Mr. Orszag said, but the administration will continue to request the $250 billion as “a precautionary measure.”

S.A. Miller and Jon Ward contributed to this report.

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