Obama must find real cost savings to establish some fiscal credibility
When President Barack Obama called his cabinet secretaries together this week and asked them to pore over their budgets for $100 million in savings, he might as well have asked them to go home and search for spare change behind their couch cushions.
The requested savings were so small relative to the budget deficits that it's hard not to be critical.
Obama's response to the criticism has been to argue that every little bit helps, saying "$100 million here, $100 million there, pretty soon, even in Washington, it adds up to real money."
He says he's trying to change the "tone" in Washington, and that creating fiscal discipline will be a step-by-step process.
Obama might have a point, but it might have been better to have privately issued the savings assignment and go public later, once larger savings could be reported.
In response to Obama's big savings directive, Senate Republican Leader Mitch McConnell of Kentucky said, "Let's not forget that at the same time they're looking for millions in savings, the president's budget calls for adding trillions to the debt."
If Obama doesn't want to be seen as offering only lip service to savings, he needs to do more. A lot more.
Critics note that Obama's savings target amounts to 0.0025 percent of federal spending for this year.
One commentator compared the cabinet savings directive to a family meeting where the household income is $100,000 a year and the projected spending is $134,000. Using Obama's percentage target, this family would address its budget crisis by trimming a whopping $3 from expenditures over the course of a year.
Several times during his campaign for president, Obama promised to "go line by line" through the federal budget to find savings, waste and abuse. He also vowed to end programs that do not work.
Now is the time to back up that promise. But so far, it looks more like a joke than a serious effort to find significant savings.
News reports this week explain that Agriculture Department officials are looking for improper crop support payments to farmers, and Homeland Security Department savings will come from purchasing office supplies in bulk. At the Department of Education, employees will have either a desktop or a laptop, but not both. And the Department of Veterans Affairs has canceled or put off plans for 20 or more conferences, and expects to use more video conferencing.
All of these efforts are worthwhile, but they should have been in place already, not something considered only now, when the president asks for belt-tightening during a deep recession and with the federal government facing record-high deficits.
There should be billions, not millions, of dollars of savings to be found in the federal bureaucracy. Obama should push for serious savings, not the small change he asked for this week.
Bigger savings might come from the Defense Department where Defense Secretary Robert Gates is pushing for cost savings and changes in how contracts are managed.
But hundreds of billions in longer-term savings will have to be found in entitlement spending, meaning Social Security, Medicare and Medicaid. But because it will be politically difficult, Obama has yet to announce his plans to curb such spending.
With the trillions of dollars that the Obama administration has committed to spend through bailouts and so-called stimulus programs, the president needs to show taxpayers that he understands the dangers of unsustainable spending by producing some serious cost savings and budget cuts.