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Reason Foundation

Weak Budget Cut Proposal Pits President vs. Congress, Taxpayers Lose Either Way

Leonard Gilroy
May 8, 2009, 3:36pm

I don't know what should be more offensive to American taxpayers—the Obama administration's utterly underwhelming $17 billion in proposed budget cuts (amounting to a whopping 0.48 percent of his proposed $3.5 trillion budget), or the fact that members of Congress are starting to scream that these cuts are way too much.

Too much? You've got to be kidding. By way of comparison, states are in the process of closing budget gaps ranging from 1 to 30 percent of their general funds, and at least 34 states have enacted budget cuts thus far. Also, there are eight states that have either proposed or passed across-the-board budget cuts ranging between 3.5 to 10 percent.

States actually have to make difficult choices and painful cuts because they're constitutionally required to balance their budgets, unlike the feds. Meanwhile, the federal government is facing a fiscal train wreck the scale of which is unfathomable to states, with ongoing, trillion-plus-dollar structural deficits under the adminstration's multi-year budget plan, not to mention some major timebombs in the looming entitlement crises and higher debt service payments to cover the doubling of the national debt over the next ten years, etc.

Yet we're supposed to be grateful that they're cutting a paltry 0.48 percent when the overall budget package would increase spending by 25 percent (as Heritage's Brian Reidl points out in this sharp and utterly depressing analysis of the President's budget plan)?

As I've said before, I'm willing to give the administration some time and room to come up with real net spending reductions, as was promised during the campaign. But so far, I'm not seeing anything remotely resembling the type of fiscal stewardship that's needed in D.C. today.

No one's backing away from the trough—instead they're expanding it—and at the same time we're seeing numerous attempts in both Congress and the White House to thwart privatization and competitive sourcing, proven policy tools that save taxpayer dollars.

Perhaps even more puzzling is that the administration could have proposed a mere $1 billion in cuts, yet they'd still face resistance from Congressmen more interested in protecting pork projects in their districts or maintaining spending on nonsensical programs with small, but loud, squeaky wheel consituencies. As a basic tactic in negotiation, wouldn't it have made much more sense to roll out $50-100 billion in proposed cuts as the opening gambit, knowing full well that Congress would ineveitably whittle it down by magnitudes? You've already got a built-in fight anyway, so why not set the bar high to demonstrate to taxpayers that you're actually serious when talking about the imperative for fiscal responsbility?

From a quick blog scan, here are a handful of worthy reads on the proposed cuts:

Those words may ultimately come back to bite the President. Instead of the "change" and fiscal responsibility promised, thus far all we've seen is a perpetuation of the failed fiscal policies of George W. Bush.

Leonard Gilroy is Director of Government Reform

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