Committee for a Responsible Federal Budget

Is Obama the Spending Terminator?

Feb 1, 2010 | Other Spending

In a blog post, this weekend, White House Communications Director Dan Pfeiffer outlined some of the terminations, reductions, and savings to be expected in this year's budget, and bragged about the Administration's success rate in convincing Congress to enact its cuts from last year's budget. According to Pfeiffer, "Congress approved cuts that produced a net discretionary savings of $6.8 billion, nearly 60 percent of the discretionary cuts proposed."

No doubt, 60 percent is impressive. And according to our own anaysis (about which we will be releasing more detail next week), the Administration actually did a little better than that -- Congress eventually approved about two thirds of the Administration's cuts. But what that means, exactly, depends on how you slice the numbers.

The 60 percent (or two thirds) success rate of savings is based on dollars. So if the Administration proposed $11.5 billion in discretionary savings, that means they achieved roughly $7 to $7.5 billion.

Interestingly, though, the vast majority of these savings come from a few large cuts in a single agency; an agency, which, by the way, will not be subject to the Administration's proposed spending freeze -- Defense.

Ending the F-22 Raptor, alone, saved $2.9 billion. Throw in the future combat systems, search and rescue helicopter, multiple kill vehicle program, transformational satellite, presidential helicopter and aircraft carrier build schedule and we are talking about $6.7 billion. That is already 58% of all the proposed cuts.

If we look at the Administration's success rate based on the number of programs, rather than dollars, it's somewhat less impressive. According to our analysis, The Congress accepted in full roughly 29% of proposed cuts, and made even larger cuts in another 4%. Meanwhile, 30% were rejected completely, and in another 16% of cases, the Congress actually did the reverse of what was requested -- increasing rather than reducing spending on the program. And 17% of the President's cuts were partially accepted, to some degree, while the remaining 4% must await a report or other rule before a final decision is made. So very broadly -- one third of cuts were accepted, just under one half were rejected, and the remaining fifth saw something in between.

[chart:2127]
(Thanks to Stephen Dinan of the Washington Times for help with compiling some of these numbers)

These still are impressive stats, to say the least. But if policy makers want to maintain a discretionary spending freeze while limiting cuts to important and worthwhile programs, they are going to have to be more aggressive in eliminating lower-priority spending.

In the coming days, we will be releasing both a full analysis of the President's Budget, and a shorter analysis of his spending cuts. For the time being, though, here are some of the cuts Pfeiffer tells us to expect in the budget:

  • Consolidating 38 Education programs into 11.  The current program structure at the Department of Education is fragmented and ineffective. The Department operates dozens of grant programs that impose narrow requirements on districts and fail to demand better outcomes or build a knowledge base of what works. Some of these programs have little evidence of success, while others are demonstrably failing to improve student achievement. As part of the Administration’s Elementary and Secondary Education Act (ESEA) reauthorization proposal, the Budget therefore proposes to consolidate 38 K-12 programs into 11 new programs that give states and districts more flexibility about means but impose greater accountability for outcomes.
  • Cutting Save America’s Treasures and Preserve America grant programs at the National Park Service. Save America’s Treasures program was started to mark the millennium and was supposed to last for two years. Both programs lack rigorous performance metrics and evaluation efforts so the benefits are unclear.
  • Eliminate the Advanced Earned Income Tax Credit (AEITC). EITC eligible taxpayers with children may file a form with their employers and receive a portion of their EITC throughout the year in their paychecks. Only a tiny number of EITC eligible taxpayers claim the AEITC; 3 percent, or 514,000 taxpayers according to the Government Accountability Office. And the error rate for the program is high: 80 percent of recipients did not comply with at least one program requirement. This ineffective and prone-to-error program should be eliminated.
  • Terminate the Brownfields Economic Development Initiative. While a consistent supporter of the brownfield clean-up on the campaign trail and a strong advocate for expanding economic opportunity in urban areas, the President proposes to eliminate BEDI, a small program duplicative of larger programs. Instead, the Administration consolidates its support for the brownfield clean-up – funding larger programs and thereby reducing overhead costs.
  • End Abandoned Mine Lands Payments to Certified States. The Abandoned Mine Land program was established to restore abandoned coal mine lands. Changes to this program allowed these funds to go to states and tribes who already have cleaned up these mine. Paying states and tribes to clean up mines that are already cleaned up was not the intention of this program, and is why it is being terminated.

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