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Obama saving federal money the easy way

The thrifty measures the president ordered for federal agencies are the equivalent of asking a family that spends $60,000 in a year to save $6.
/ Source: The Associated Press

Cut a latte or two out of your annual budget and you've just done as much belt-tightening as President Barack Obama asked of his Cabinet on Monday.

The thrifty measures Obama ordered for federal agencies are the equivalent of asking a family that spends $60,000 in a year to save $6.

Obama made his push for frugality the subject of his first Cabinet meeting, ensuring it would command the capital's attention. It also set off outbursts of mental math and scribbled calculations as political friend and foe tried to figure out its impact.

The bottom line: Not much.

The president gave his Cabinet 90 days to find $100 million in savings to achieve over time.

For all the trumpeting, the effort raised questions about why Obama set the bar so low, considering that $100 million amounts to:

  • Less than one-quarter of the budget increase that Congress awarded to itself.
  • 4 percent of the military aid the United States sends to Israel.
  • Less than half the cost of one F-22 fighter plane.
  • 7 percent of the federal subsidy for the money-losing Amtrak passenger rail system.
  • 1/10,000th of the government's operating budgets for Cabinet agencies, excluding the Iraq and Afghan wars and the stimulus bill.

Obama only asked his Cabinet secretaries to identify waste in their annual operating budgets, which total a little over $1 trillion. He's leaving out war costs, the economic stimulus measure, the Wall Street bailout and benefit programs like Social Security and Medicare.

The spin
"He will challenge his Cabinet to cut a collective $100 million in the next 90 days," said a White House news release. "Agencies will be required to report back with their savings at the end of 90 days."

"I'm asking for all of them to identify at least $100 million in additional cuts to their administrative budgets," Obama told reporters afterward. "None of these things alone are going to make a difference, but cumulatively, they would make an extraordinary difference because they start setting a tone."

The fuller story
Obama's marching orders to the Cabinet on Monday were less than meets the eye. Many of the savings he asked them to achieve are already under way and are included in the calculation.

To be sure, this is an extra effort, on top of an agency-by-agency review of programs and proposed multibillion-dollar cuts in weapons programs. But it is decidedly marginal.

"It's always a good sign when the president is talking about savings," said Marc Goldwein, policy director of the Committee for a Responsible Federal Budget, a nonpartisan group that advocates fiscal discipline.

"It's valuable as a symbol," he said, "but $100 million is just not going to cut it."

Republicans were quick to point out that borrowing costs for February's stimulus package will on average cost almost $100 million a day over the next decade.

In large measure, the examples of economizing given by the White House were of the painless, seemingly commonsensical variety. They were not the program cuts that people feel and that budget-watchers say are essential to make a meaningful difference in the exploding deficit.

Some of them will take many years to play out.

The Agriculture Department, for one, will move 1,500 employees from seven leased locations into one place in early 2011, saving $62 million over 15 years.

Some are hard to quantify.

Will buying multipurpose office equipment, such as a combined copier, printer, fax and scanner all in a single unit instead of separate units, really save the Homeland Security Department $2 million a year over five years?

Some are microscopic. The White House estimates savings of tens of thousands of dollars from freeing up warehouse space stashed with obsolete equipment that had been used by a federal entity few people have heard of, the Bureau of Information Resource Management.

And some raise eyebrows at wasteful practices of the former administration.

The White House says Homeland Security, the third largest federal department, has not been buying most of its $100 million a year in office supplies in bulk.

The administration thinks it can save $52 million over five years with bulk-buying bargains at the department.