Obama Budget Cuts: Will Order Cabinet to Quickly Cut $100 Million From Department Budgets

WASHINGTON — President Barack Obama on Monday ordered his Cabinet to find ways to slice spending by $100 million, but acknowledged it's a "drop in the bucket" and said there's a "confidence gap" that he needs to overcome. Just back from a Latin America summit, Obama told the first formal Cabinet meeting of his administration that vast spending to combat the economic crisis was "the right thing to do." But he also said taxpayers still need to know that every dollar they give the government is being spent wisely.

"We also have a deficit _ a confidence gap _ when it comes to the American people," he told reporters. "And we've got to earn their trust."

Obama said the $100 million would come from "efficiencies" in agency operations, and would be in addition to future cuts in programs that aren't working.

Yet the red ink in the annual budget is currently in the hundreds of billions. He was asked if the efficiency saving isn't just "a drop in the bucket".

"It is," he replied. "None of these things alone are going to make a difference. But cumulatively, they make an extraordinary difference because they start setting a tone ... $100 million there, $100 million here _ pretty soon, even here in Washington, it adds up to real money."

The federal deficit for March alone was $192.3 billion, and $100 million would represent a minuscule portion of that sum, roughly one-twentieth of 1 percent. Obama in February brought forward a $3.6 trillion budget for the 2010 fiscal year, beginning Oct. 1, a proposal that would produce $9.3 trillion in deficits over the next decade.

Senate Republican leader Mitch McConnell said he applauded all attempts to cut government spending but insisted that a $100 million cut would only cover one day's interest on Obama's $787 billion stimulus spending plan.

White House spokesman Robert Gibbs said later that the cuts were part of a larger cost-cutting effort by Obama. He said the president "has laid out cuts large and small in administrative costs" and in programs throughout the government.

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Earlier this month, both the House and Senate passed companion budget plans giving Obama and his Capitol Hill allies a key victory, but 20 House Democrats from GOP-leaning areas abandoned him on the final vote because of unhappiness over deficits.

The Cabinet meeting came just days after a series of "Tea Party" demonstrations across the country in which protesters challenged the administration over it's massive spending to help pull the country and its financial system out of an economic nose dive unseen in decades.

Even among budget cuts cited in a newly released White House summary, a considerable proportion of the savings would occur over a period of years.

It pointed out projected cuts in office supplies and computer software at the Department of Homeland Services, for instance, noting that the agency spends $100 million a year on this "but virtually none of the supplies are purchased through agreements that leverage the department's collective buying power."

Thus, it said, DHS estimates that it could save up to $51 million over five years by purchasing in bulk.

It said that $62 million could be saved over a 15-year lease term if the Agriculture Department were to combine roughly 1,500 employees from seven leased locations into a single facility by early 2011.

The White House summary also said that $6.7 million could be saved over the first five years by having U.S. attorney offices and the U.S. Marshals Offices' Asset Forfeiture program convert publication of forfeiture notices from newspapers to the Internet.

The worksheet also said that $5 million a year could be saved by consolidating embassy posts at the State Department and U.S. Agency for International Development.

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Associated Press writer Mark S. Smith in Washington contributed to this report.

Comments

[SethBLiNK]

The criticism of this is really silly.

Over the past years, many people have lost their jobs. Others have seen their retirements savings reduced by 20, 30 or 40% in the period of three months. And many people's responses have been to stop have that Starbucks every day, or to switch to store brands, or to clip coupons a bit more. Is a person who has no job, or who lost the equivalent of 10 years of savings going to be okay because they cut their weekly savings by $30 per week?

No, but a person who is living more efficiently is more likely to find savings elsewhere and to discover a certain pleasure in learning to live with less.

Our President is trying to change a culture. While spending massive amounts of money to keep the economy going, he is also trying to install a certain amount of austerity. He's asking agencies to operate efficiently. It's a smart thing to do.

[MisterRooster]

Your argument is comparable to a family faced with economic downturn saving $1.87 by using store coupons while buying a $3,000 dollar flat screen on credit. The spending on nice to haves has to take second seat to austerity if austerity is to have any effect.

[SethBLiNK]

In our mutual analogy, you are comparing a family purchasing a flat screen TV to be the equivalent of the government pumping money into the economy to keep credit markets fluid and to keep major industries afloat. I don't think that analogy holds. It would be more like spending those same $3,000 to keep a child in a better school or to put braces on his teeth.

[mike42nola]

I agree that any cuts in federal spending, no matter how miniscule, are moving in the right direction and should not be criticized as much as is being done here.
The problem is that you (The President) have one of your own advisors or one of your own spokespersons that just told the public that 80 times the amount of the cuts was a drop in the bucket of the budget.
I want the cuts. I want to see a whole lot more cuts. I want to see hundreds of billions of dollars cut out of the budget. I want to see all political parties and all branches of the government working towards balancing the budget, paying off the deficit and start earning interest instead of paying so much in interest.

[popart]

now what can the GOP find to moan when the president has directed the government to cut expenses....except what he himself has said....that it is a pretty small fiqure....but it is an important gesture....so how can that not be a good thing.....

[amiri1]

Obama is creating a new business paradigm. Every agency, corporation, business or enterprise in this nation has fat that needs to be trimmed.

[mike42nola]

As well do most families

[LinkSync]

Is that a 100 million total or per department?

It makes a difference.

[desertman]

So I found out these radical cuts will come by “purchasing office supplies in bulk” and teleconferencing when applicable. They account for roughly five one hundredths of a percent of last month’s -- just March’s -- $192 billion federal budget deficit!

Ooooh…

That’s like making a $5 payment on a $10,000 monthly credit card bill.

If your neighbor sent the bank a check for $100 on a $200,000 loan, he’d be a bum on the verge of personal collapse -- the village idiot. In Washington, he’d be the leader of the free world.

[Carrie-On]

If I hear one more person moan that we cannot nationalize the banks, and other companies I'm going to hit them over the head; we already did that, in September 2008! The problem is now, we do own the majority of the stock, we the taxpayers, so why are these Tea Party idiots screaming about taxes, when taxes have been reduced, and not going after our money/shares in these "bailed-out" institutions, and companies, and fire the rearends of their top management?
Why, indeed? Because it's all politically motivated by the silent far-right extremists who put us in this mess! Back to Square One. Oust them all, now.

It's time we heard from the POTUS, that he fired everyone (or locked them up in the former WH bowling alley) and did what is right for America, not the for-profits! Again, save the people, oust the "Pillars"! All bankers/CEOs/ and WS execs must go - save the banks, companies, and Americans in our homes!

[mike42nola]

The tax cuts are a step in the right direction but not nearly enough. The cuts on spending, ditto.
Your suggestions are way off for a Democrat. You want to save institutions but don't care about the people? Who really cares about an institution and how will they be run without people? Get rid of bankers and CEO's? Who will they be replaced with? More bankers and CEO's I would presume. Are you now wanting to make sure democrats run all businesses?
If your post weren't so out of the ball park with reality it wouldn't have even warrented a reply.

[TaxDayMan]

1/35,000th of the total budget what a crock!

[dontvote4him]

Kind of like the election outcome. What a crock that was.

[tiotom77]

First cut..AIR FORCE ONE.. $600,000 an hour to fly him and his staff around the world. Maybe the President needs to stay home and get some work done.

[dianhow]

Hey Its been in all the papers.
Obama has been working non stop for 3 + months.
Part of this job is to deal with world affairs.
The President is not in a bubble- its called world affairs.
Remember Iraq & Afghanistatin ?

[Cool-headed]

Engaging with other countries in a peaceful and amicable way is also getting work done, big way. The US is not alone in the world. What other countries feel towards the US is important in many ways and Pres. Obama has been able to turn the tables virtually single-handed. It's very hard to hate America when you have such a man at the helm.

[Thordeer]

I'd love to see this headline:

"Budget to Cut $1400 from Peppermint Candies on Desks"

right next to:

"Financial Bailout Hits $4 Trillion"

[dianhow]

Reality alert Thor
We ALL know these numbers are huge. But did you notice what has happened for the last 25 + years - under GOP rule ? Yes 20 of the last 28 years have been under GOP created policies.
Reagan / then both Bush's policy of deregulating banks & WAll st planted the seeds of this meltdown / crisis. SO yes- Drastic steps are needed to try to ' shock ' the economy into some
kind of 'normalcy.' if at all possible. It took 25 + years to get here- a few months can not UNDO IT !

[mike42nola]

Dianhow,
You really need to pay attention to who has been in Congress the last 30 years and see what spending bills they supported. All the President does is sign off on them and cannot veto any single line item which is why the President needs that power.
Congress is the source of all spending and congress is what needs to be fixed. Not the Executive Branch. We already have term limits there and it works.
We need to get out of the blame game and into the fixing game. Term limits for Congress is the answer.

[dontvote4him]

We've been in control of congress for the last 25+ years? Dang, I missed something.

[Carrie-On]

Sorry, it's $9.9 Trillion now (as of mid-March 2009).

It's time for action Mr. POTUS! You know what to do. Americans are behind you - more than anyone in Congress or the WH is. . .

[mike42nola]

And that has been the problem since President Johnson was in office. His own party would not support him and the same was true with President Carter.
Congress has ignored the true will of the American people since the Eisenhower years.
Even though taxes have gone down a lot since that time spending, especially deficit spending, has increased astronomically. You don't have to be an economist to understand that sooner or later you have to pay the bills and you just don't have enough of a tax base to do this.
Demanding action from Congress and changing faces in congress is our only hope.
We cannot get lulled into just voting for Democrats or Republicans and reelecting these same elitist bums. We need to throw them out, term limit them at the ballot box and send a message that is loud and clear. It would really be pleasing to me if we kept the same make up of seats between dems and repubs but changed the faces of who sits in those seats.

[Thordeer]

Perhaps the biggest catastrophe in all this bailout business--and that's saying something--is how the plans are encouraging more gaming of the system, more corruption, more heads they win tails we lose. reason number 346 for wiping them out.

[jesseandrews]

department of homeland security said they can save over 52 million dollars over 5 years by buying office supplies in build what a joke

[bubbuh]

Show them the error of their ways. Kick in the 52 million yourself. Won't their faces be red.

[jake1492]

lol

[Cool-headed]

It's not a joke. It sends a very positive signal of "stop wasting". If every department cuts their unnecessary expenses it does amount to a respectable sum and mostly, it sets a very good example. Even for ordinary consumers. Why spen 50 million on office supplies unnecessarily??
Obama is doing exactly what he said he would do during his campaign - go line by line cutting costs. If he weren't doing this now he would be criticized too. Fortunately he doesn't mind criticism too much. He's too busy working and fixing the country.

[AspenFreePress]

I'm just glad the $100 million cut didn't come before the big banks got their share. Somebody's got to remain in business to charge 30 percent interest rates to consumers, right? Sterling Greenwood/Aspen Free Press

[berrycooda]

WHY CAN'T CONGRESS TAKE A PAY CUT LIKE THEY EXPECT THE LITTLE GUY TO DO.

How about all the retired Congress people (over 400 of them) They make more for
retirement than most people make in a year...

THIS IS NOT FAIR.

How many chefs are there in the White House....How much does it cost to use Air force one and Marine Helicopter one....

I won't mention the dog food, but I wish so much ado wouldn't be made over this cute little puppy.
How many people have had to give up their pets because they have lost jobs and
can't afford to keep their pets.

Make the IRS collect money owed from a lot of people in Washington who don't pay until their name is in lights and then they suddenly remember that they forgot to pay.

IS THIS FAIR.....H..L NO....Maybe we should start paying some of the Congress
in tea bags.

[mike42nola]

My biggest gipe with the pay system for Congress is they get an automatic raise every year unless they vote against it. The raise that they gave themselves right after the election is 10 times more than the token $10 per week that we are getting in our paychecks from the Presidents tax the rich by a whole lot and give a little bit back to the middle class.
The Legislatures pay should be tied to their own districts per capita income. We have allowed a monster to be built out of congress and we need to stop them in their tracks right now.
No matter who the President is there is very little chance for success unless the voters speak loud and clearly and throw the incumbents out in the mid term elections coming up next year.
We need to impose term limits on these bunch of elitists since they won't do it themselves.
Please put the partisan rhetoric aside and vote a new face into congress in your district in 2010. We must take control of our government and this is the only way I know how to do it. If a representative or senator has been in office for two terms or more vote someone new in.

[dontvote4him]

Somebody voted them in.

[Cool-headed]

As far as I know his dog's food is paid by himself (as well as Michelle Obama's outfits). Who told you it's paid by the govt.? And if he does not have a pet, how will this help families who cant afford their pets? Come on, this is really a lame criticism.

[cbat]

So let me get this straight, spending too much is bad and cut spending is bad also. I suspect that no matter what Obama does, you right wingnuts would rather cut your wrists, then give him a chance. FYI, Bush passed one of the largest spending bills history, but I guess that was ok as long as done by a republican, right.

[cjt1957]

A few weeks ago $8billion in earmarks was chump change to Obama. So what does that make $100million

[mike42nola]

I admire him for cutting at all. Most Presidents don't worry about this side of the economic equation and if they do they don't worry about it enough.
That being said cutting a billion dollars isn't enough and it is way too late. The budget that he just signed increases the interest payment on our national debt from $150 billion in 2009 to $550 billion in 2014. How much of a dent will a billion dollar a year cut put in this disaterous trend of deficit spending. Not enough. The biggest shame of having to pay all of this interest is that it is only good to pay for the cost of money that we borrowed. It doesn't help educate kids or pay for disadvantaged kids lunches, it doesn't pay for healthcare for the elderly. It is just a waste of money and if we put a stop to deficit spending we could use the 150 billion dollars this year to do a lot of good, lower taxes for everyone and incentivize more industry and businesses to hire more people or give pay raises to the people that are already working.
The huge interest payments are going to kill us and devastate our economy. Cutting 1 billion isn't soon enough or nearly enough.

[theone718]

Just incase anyone reads this wrong. He is asking EACH cabinet member to cut 100 million. Added up that's a cool billion. You get mad at him for spending and not cutting enough, he decideds to cut and you criticize him anyway? Some of you are complete jokes.

[Y3rMawm]

Pull facts out of your @$$ much? Nowhere was it ever said that $100miliion in cuts were to come from each dept. This is $100million in aggregate. Even $1Billion ain't enough. Gimme 5 more zeros then we're talking.

This country needs to go back to Home Ec. 101 and learn to balance a checkbook. Even still I am betting everyone here can balance their home finances better than the State.

$100 million - $3trillionish (before the lower tax receipts begin rolling in) = Epic Debt.

Explain to your brats how you were weak,. and sold em into slavery.

[bubbuh]

"So one of the things that -- messages that I delivered today to all members of the Cabinet was: As well as you've already done, you're going to have to do more. I'm asking for all of them to identify at least $100 million in additional cuts to their administrative budgets, separate and apart from the work that Peter Orszag and the rest of our team are doing to go line by line with the budget and identify programmatic cuts that need to be made.

"And in the next few weeks we expect to cut at least 100 current programs in the federal budget so that we can free up those dollars in order to put them to use for critical areas like health care, education, energy, our foreign policy apparatus, which is so important."

http://www.whitehouse.gov/blog/09/04/20/100-million-there-100-million-here/

You are rude, ignorant and wrong. Foryunately, you're noy in charge of anything important.