The Obama Administration rolled out another cost-cutting program Tuesday morning. It was quickly dismissed by Republicans and White House critics who said the president shows little regard for the federal government’s worsening fiscal situation.
The administration is asking Congress for the authority to allow federal departments to cut 5% of their budgets, and then redirect half those savings to other programs. An administration official described the initiative as an incentive to curb discretionary spending.
Known as transfer authority, it would apply only to Fiscal Year 2011 spending, spanning October 1, 2010 to September 30, 2011, and would need approval from Congress. An administration official said the president will ask for this authority for each future budget he proposes.
“The monthly federal deficit numbers from the CBO show the deficit for May alone ($142 billion) is several times more than what the administration hopes to save from this new Orszag announcement,” said the Senate Republicans’ leadership office in a statement.
The national debt is more than $13 trillion dollars, the Federal Reserve projects U.S. debt to exceed the size of its economy by 2020, and the president’s budget features annual deficits no lower than $700 billion dollars for the next decade.
“The two things that are growing fastest in this Democrat economy are the size of the federal government and the crushing burden of the national debt,” said Senator Mitch McConnell this morning in a statement.
Democrats and the White House continue to fight those charges.
For the 2012 budget, which the administration is preparing and will submit to Congress early next year, Office of Management and Budget Director Peter Orszag and Chief of Staff Rahm Emanuel have requested all non-defense federal departments to identify programs that have the “lowest impact” on their agency’s mission and constitute at least 5% of their discretionary budget.
“The bottom line is that we do not have the luxury of simply spending more … the President is asking for a renewed effort to go through your budget line by line with a critical eye to target programs that are not the best use of taxpayer dollars,” said the request, now posted on the Office of Management and Budget’s website.
In addition to the White House’s latest spending initiative, administration officials point to the president’s $20 billion in annual budget cut requests, $100 billion in proposed savings from limiting errant government payments and a three-year freeze on non-security discretionary spending advertised to save $250 billion over ten years.
Republicans point to an $800-billion-plus stimulus package, already increased levels of discretionary spending, and hundreds of billions more in proposed aid to states and the unemployed. The cost of the majority of these initiatives goes to the national debt.
The president has acknowledged the federal budget is on an unsustainable trajectory. The 2011 budget’s deficit projections include the explainer “Without Fiscal Commission” in the subject line. The president has charged a bipartisan, non-binding, 18-member panel with assembling recommendations designed to balance the budget, excluding interest payments on the debt, by 2015.
At least 14 of the 18 panelists must agree on a set of recommendations for the commission to produce a report. If it does, and critics doubt it will, the commission has no authority to force Congress to vote on those recommendations.
Because of opposition among Democrats and Republicans, lawmakers defeated a measure to create a binding debt commission. It would have forced a congressional vote on its recommendations.
The binding commission failed mostly because of increasingly entrenched political positioning. Democrats voted against it over concerns it would lead to painful spending cuts. Republicans rejected it because of fears it would lead to higher taxes.