White House Identifies Billions in Cuts for 2010
The Obama administration announced today that it has identified 121 terminations, reductions, or other areas of savings designed to save $17 billion in 2010.
“I want to be clear: there are many, many people doing valuable work for our government across the country and around the world. It’s important that we support these folks – folks who don’t draw a big paycheck or earn a lot of praise but who do tough, thankless jobs on our behalf. This is not a criticism of them,” President Obama said Thursday.
“At the same time, however, there is a lot of money being spent inefficiently, ineffectively, and – in some cases – in ways that are actually pretty stunning.”
The White House Office of Management and Budget released a volume titled “Terminations, Reductions, and Savings” that details each cut and explains the reason for the cut.
“Some programs may have made sense in the past – but are no longer needed in the present,” Obama said. “Other programs never made any sense; the end result of a special interest’s successful lobbying campaign. Still other programs perform functions that can be conducted more efficiently – or are already carried out more effectively elsewhere in the government.”
For example, the LORAN-C, a $35 million, long-range, radio-navigation system, is going because it has been made obsolete by GPS. The Abandoned Mine Lands Payments, a $142 million program, is now used to clean up mines that are already cleaned up.
The Advanced Earned Income Tax Credit, valued at $125 million, benefits very few taxpayers and has an extremely high error rate: GAO found that 80 percent of recipients did not meet at least one requirement.
Read OMB Director Peter Orzag’s blog post discussing the budget cuts
“Some of the cuts we’re putting forward today are more painful than others,” Obama said. “Some are larger than others. In fact a few of the programs we eliminate will produce less than a million dollars in savings. Of course, outside of Washington, that’s still a lot of money.”
The president noted that the $17 billion savings are enough “to pay for a $2,500 tuition tax credit for millions of students as well as a larger Pell Grant – with enough money left over to pay for everything we do to protect the National Parks.”
In addition to these 121 cuts, the president said his administration is taking other cost saving measures:
- a presidential memorandum to end superflous no-bid contracts and reform the way government contracts are awarded for an annual savings of $40 billion.
- a proposal from Secretary of Defense Robert Gates to eliminate expensive and out-dated weapons systems.
- a congressional proposal to reform defense contracting, which is burdened with wasteful spending and cost overruns.
- the elimination of subsidies to the health insurance companies through Medicare, saving roughly $22 billion each year starting in 2012.
Overall, the president wants to cut the deficit in half by the end of his first term and reduce non-defense discretionary spending to its lowest level of the gross domestic product since 1962.