Obama Budget Chief Outlines Paltry Spending Cuts
Policy + Politics

Obama Budget Chief Outlines Paltry Spending Cuts

President Obama’s State of the Union speech was heavy on investment strategies for boosting the economy and sharpening the country’s competitive edge but relatively light on how to bring down the long term debt. Now comes White House Budget chief Jacob (“Jack”) Lew with a preview of Obama’s new budget and plans for mitigating the economic effects of years of deficits and debt that some may find equally light.

In an op-ed in the Sunday New York Times, Lew declares, “We cannot win the future, expand the economy and spur job creation if we are saddled with increasingly growing deficits,” and that there are nothing but tough choices ahead of us.  When Obama formally unveils his fiscal 2012 budget in a week, Lew promises it will be “a comprehensive and responsible plan that will put us on the path towards fiscal sustainability in the next few years – a down payment toward tackling our challenges in the long term.”

But the examples he offers of tough belt-tightening are relatively modest and would barely put a dent in the staggering $1.5 trillion budget deficit that the Congressional Budget Office has projected for the current fiscal year. Those measures would include:

  • About $350 million cut in federal community service block grants that have helped to support community action organizations in cities and towns across the country. “These are the kinds of programs that President Obama worked with when he was a community organizer, so this cut is not easy for him,” Lew notes.
  • A $125 million cut in the Great Lakes Restoration Initiative, which supports environmental cleanup and protection – a reduction of about a quarter of the current funding level.
  • A $300 million reduction in the Community Development Block Grant program – flexible grants that help cities and countries across the country finance housing, sewer, street and economic development projects  in low and moderate-income neighborhoods.

While these proposed cuts are certain to prompt howls  of concerns from governors, mayors and other state and local officials, they amount to less than $1 billion of savings in a multi-trillion-dollar budget. For sure, the administration will offer more ambitious savings – including a proposed five-year freeze on discretionary spending other than for national security that would save $400 billion over the next decade, as well as a reduction in Defense Department spending by $78 billion over the next five years.

But the Obama plan as outlined by Lew, the new director of the Office of Management and Budget, is a far cry from the jack-hammer approach to domestic spending being advocated by House Budget Committee Chairman Paul Ryan, R-Wis., /node/50227  and other House GOP leaders. Nor does it embrace the far ranging restructuring of the entitlement and tax code that was advocated late last year by the president’s own deficit commission /node/49982  and other groups. As a reminder of that, former Sen. Alan Simpson of Wyoming, a co-chair of the fiscal commission, had this to say on CNN's 'State of the Union' this morning:

"If you hear a politician get up and say, 'I know we can get this done. We're going to get rid of all earmarks; all waste, fraud and abuse; all foreign aid; Air Force One; all congressional pensions.' That's just sparrow belch in the midst of the typhoon. That's about six, eight, ten percent of where we are.”

“So, I'm waiting for the politician to get up and say, 'There's only one way to do this: You dig into the big four -- Medicare, Medicaid, Social Security, and defense,'” he added. “And anybody giving you anything different than that, you want to walk out the door, stick your finger down your throat, and give them the green weenie."