Obama lets the budget ax fall — but gently

May 7, 2009

President Barack Obama has been threatening to crack down on government spending and on Thursday he let the budget ax fall — but gently.
 
He unveiled $17 billion in cuts as part of his administration’s budget for the 2010 fiscal year.
 
OBAMA/BUDGET“We can no longer afford to spend as if deficits don’t matter and waste is not our problem. We can no longer afford to leave the hard choices for the next budget, the next administration — or the next generation,” Obama said.
 
$17 billion.
 
That would be about one half of one percent of his $3.55 trillion budget.
 
Nearly 1.5 percent of the projected 2010 deficit.
 
And about $1 billion less than what President George W. Bush proposed to cut from the previous year’s budget.
 
By comparison, the American family with a median income of about $51,000 a year looking at a 0.5 percent budget cut would need to trim $255.

Asked to explain the discrepancy between the president’s tough words and his meager cuts, White House spokesman Robert Gibbs said the administration was only just beginning to go through the budget line by line to eliminate waste.
 
“Our budget will bring non-defense discretionary spending to the lowest level as a share of our GDP since we began keeping records in 1962,” he said. “We’ll cut the budget deficit in half in four years and put ourselves — put this country — back on a path toward fiscal sustainability.”
 
The White House then sent round a release from Senator Tom Coburn praising the cuts. Coburn is a notorious Republican budget hawk — and Obama friend — who has repeatedly bottled up legislation in the Senate complaining about its cost.
 OBAMA/BUDGET
Other Republicans were less charitable.
 
Senate Republican Leader Mitch McConnell called them “modest spending reductions totaling a fraction of a percent of the trillions his budget would add to the debt.”
 
So what are the president’s budget-cutters planning to chop?
 
The educational attache to UNESCO in Paris. Gone. (Let ‘em use teleconferencing, Obama says.)
 
Fixing up the nuclear accelerator building at Los Alamos. Forget about it — the research they do is important for Obama’s energy independence plans, but they can live in the building as it is.
 
The super-duper helicopter that would replace the president’s current fleet — chopped back by about 90 percent.
 
And more.

So what do you think — are the cuts just token? Or has Obama made a real start toward getting a handle on federal spending?
 
For more Reuters political news, click here.

Photo credit: Reuters/Kevin Lamarque (Obama speaks about budget cuts);  Reuters/Jonathan Ernst (Copies of the budget book on display)

15 comments

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/

I think it is totally asinine that the media is focused on the 17 Billion that the administration is trying to save. This compares to me cutting $17.00 out of my $3,550.00 household budget next year. Of course being broke I do not have the $3,550.00 to begin with. And if I adopt the governments policy and just go out back and print it up I go to jail. What the hell is wrong with the people in this country did you all drink the cool aid.

Posted by Tim Tracy | Report as abusive

What can I say? As congress is pressing for tax increases for the population due to their inept passage and enforcement of laws, rules, and regulations governing our country it seems they should share in the economic downturn just like we all are doing!

As most retirement plans have decreases on average of 50% it seems only fair that congress and the remaining federal government reduce their salaries, expenses and staff (total government employees) 50% also!

Something has to be done and it is up to the public to start the ball rolling for fiscal reforms to government employee benefits and salaries.

Why should we pay them to make these types of mistakes?

Get the ball rolling and contact your local churches, clubs, meetings, town halls, state congressmen and discuss this at your next tea party!

Please pass this to all of your e-mail contacts and post on as many political news agencies on the net as often as possible until changes are made!

On another note, I fully expect to be hounded by the federal government for this matter, so if you are faint of heart, please do not pass on but would appreciate your moral support!

Sincerely,

Me!

Posted by Randy | Report as abusive

Fire half of all government employees? Yeah, that’ll help us get back on track.

Posted by Drewbie | Report as abusive

I think this is a token response, and a tepid one at that. I also think if Obama were serious about cutting spending he would have waited to report on cuts until he had significant results to declare. This is just a show, and another smoke and mirror attempt to be able to say he cut spending. I understand that something needed to be done to help our failing economy. However, printing additional money and going into debt with foreign investors just is not a good idea. History shows that spending can increase inflation, and cripple future earners ability to get ahead. What about the AMT? Sure, Obama has put it on hold a while longer but if allowed to go into effect millions of middle class families will no longer be middle class, as they will be taxed out.

Posted by seree | Report as abusive

This was a drop in the bucket as to the 3 trillion dollars he is choosing to spend while Americans are under going some stuff belt tightening.
This liberal President is using smoke and mirrors to project and image of austere measure coming from his handling the economy.
He really is just a spend, spend liberal that likes the idea of bankrupting America.
His idea of governing is bigger government is better. Taxing the taxpayer is his fondest wish for providing for all the lazy people that want to live without paying taxes and still benefit from society.
Obama is without a doubt the most liberal of any President to date with the Treasury of the United States funding government while ignoring the peoples right to non interference into the lives of it Citizens or over taxing them for Socialistic Agenda.
Karl, Mao, Castro, Hugo and the United Nations 3rd world governments are proud of the path Obama is taking America. Broke with a beggars appeal for help.
Can America survive this inexperienced Socialist, is the question and does Obama even care that his path, is the ruination of a once great nation. Under Obama it is just lets all be socialist. Taking from the rich to give to the lazy people that worked to put him into office, so that they might not have to work.
The Eagle a symbol of the United States is on drugs and Obama is feeding it personally.

Posted by Norm | Report as abusive

Slavery reborn in America.
Millions of Americans will suffer and our future generations will be crippled.
But the good news is, Corporate America, those same companies outsourcing our jobs, the Federal Government those same politicians who can’t say what they mean and mean what they say, will be fine.

Posted by plutocracy101 | Report as abusive

All this spending is just going to keep the “crisis” going. Without it, Obama and the far left progressive democrats will lose their power. Keep us all beat down and make it look like they are saviors to help us. It is very scary.

When they add government run universal health care, they will tell us they won’t treat us because it is too expensive. If you are old, then you will have to learn to live with pain. If you aren’t scared now, you will be.

Posted by TC | Report as abusive

Re

The government will make cuts mostly from cuts in social security + medicaire . Greenspan took FOOD + energy out of the inflation index used to calculate raises in social security . The core CPI is a scam ! Now OBAMA is going to bail out folks with 2nd mortgages so ‘ they can be relieved of this debt ” HOW will they learn from their GREED + stupidity !Banks bailed out with TRILLIONS , but social security recepients to get NO increases for years , AFTER they took FOOD + energy OUT of the Question ! Why aren’t government employee , all levels pensions = healthcare CUT ?

Posted by Linda Frey | Report as abusive

I am encouraged by the job cutting stance by President Obama. It is critical that government employees realize that their positions do not have a blank check. Has anyone noticed that when budgets have been cut in the past, it is the American taxpayer who gets reduced benefits, it is time for the career politician to face cutbacks. Leave our health care and other services alone.

Posted by MaryAnne B. Phillips | Report as abusive

The US is the richest in the world today, yet many Americans are so worried about their health cares. We are so unable to understand.

Posted by Wang Xu | Report as abusive

It is necessary for President Obama to go through the budget cutting process…prior to going through the revenue raising process.

Let’s just hope that he has the political courage to do what George H.W. Bush and Bill Clinton did in 1990 and 1992, respectively, i.e., raise the top marginal federal income tax rate. Bush raised the Reagan rate of 28% to 31%. Clinton raised the Bush rate of 31% to 39.6%.

Unfortunately, the Reagan rate of 28% and the George W. Bush rate of 35% (he lowered the Clinton rate) and 16 Reagan/Bush years of republican spend, borrow and tax the middle & working class (instead of the wealthy)…have transformed America into a debtor nation with a $12 Trillion U.S. Public Debt to extinguish.

We’re going to need at least a 70% top marginal rate (the pre-Reagan rate) in order to put things right.

OKJackGroup
oklahomajack.com

Posted by OKJackGroup | Report as abusive

70%top tax rate,and the UAW running chrysler and GM,and acorn running the census,that sounds very revolutionary comrade.

Posted by brian lee | Report as abusive

Check your math before publishing.

0.5% of $51,000 = $2550.00 is not correct try $255.00 That helps make the point that the cuts are just a political statement. Washington does not care about spending all they have to do is keep people ignorant about the facts and they win.

Posted by Tracy | Report as abusive

You’re right Tracy, $255 it is. Thanks for pointing that out. I’ve fixed it.

Posted by David Alexander | Report as abusive

The 1964-1980 70% top marginal federal income tax rate was not a tool of “comrades”.

President Kennedy (D) and Congress lowered the 91% Eisenhower (R) top rate of 1954-1963 to 70% in 1963.

Presidents Johnson (D), Nixon (R) (through the 11-year Vietnam counterinsurgency), Ford (R) & Carter (D) paid America’s bills and minimized America’s debt using the 70% top rate. In 2009 dollars, the U.S. Public Debt was $2 trillion at the beginning of the Reagan administration in 1981…a mere 1/6 of the $12 Trillion it is now at the end of the Bush administration in 2009.

Along came President Reagan (R) [and democrat/republican congresses, i.e., Ways & Means Chair Dan Rostenkowski (D), late House Speaker Tip O'Neill (D) & Senate Majority Leaders Howard Baker (R) & Bob Dole(R)] and Reagan’s “revolutionary” cuts in the top rate from 70% to 50% (1981) and then to 28% (1986). President Bush compounded the problem of unpaid bills and growing republican spend & borrow debt when he gratuitously cut the successful Clinton top rate from 39.6% (1992-2000) to the present unsustainable 35% top rate in 2001.

We here say “successful top rate”, because a net increase of 21 million new jobs were created between 1993 & 2001…and America’s bills were paid so successfully that a budget surplus (rather than deficit) came about…and the U.S. Public Debt actually began to be paid down again…and the net monthly surplus in the Social Security Trust Fund ceased to be used to mask the size of the net monthly deficit in federal spending.

Because of the 16 years of low top rates during the Reagan & Bush (the son) years, the United States now has a net loss in jobs of $2.6 Million (2001-2008), a near Depression, a $12 Trillion U.S. Public Debt, 2 (and perhaps 3)-front unsustainable counterinsurgencies in Iraq, Afghanistan (and perhaps Pakistan)…as well as massive $Trillion deficit spending.

One might want to compare what is going on now with President Obama [after the Bush (the son) years] with the New Deal, when President Roosevelt and Congress tried to overcome the sloppiness of 10 years of republican presidential and congressional accounting and unsustainable low top rates (up through President Hoover) and the stock market crash of 1929 (partially owing to Phill Gramm-like (R) nonseparation of deposit & investment banking on Wall Street)…and the onslaught of the Great Depression, which only ended after the most catastrophic war in world history, i.e., World War II.

OKJackGroup
oklahomajack.com

Posted by OKJackGroup | Report as abusive