Lew asks agency heads to idenitfy deeper savings

Seeking to implement the new debt ceiling deal, White House Budget Director Jack Lew in an Aug. 17 memo has asked agency heads to identify ways to cut their 2013 budgets by 10 percent.

Lew wrote that agencies should aim their 2013 budget requests to cut 5 percent compared to current 2011 spending. This is the same level of cuts his predecessor Peter Orszag requested last year.  The agency requests will be evaluated by the Office of Management and Budget as it prepares the president's 2013 budget request that comes out in February.

In a sign of the pivot to austerity, this year's memo goes beyond 2010, asking agencies to find an additional five percent of savings.

"As discussed at the recent Cabinet meetings, your 2013 budget submission should also identify additional discretionary funding reductions that would bring your request to a level that is at least 10 percent below your 2011 enacted discretionary appropriation," Lew wrote.

"By providing budgets pegged to these two scenarios, you will provide the President with the information to make the tough choices necessary to meet the hard spending targets in place and the needs of the Nation," he said.

Lew on Thursday clarified in a blog post that the administration is not expecting to cut all agencies by 10 percent or even 5 percent.

In the memo, Lew warns agency heads to refrain from gimmicks. He tells them to avoid using " reductions or reductions to mandatory spending in appropriations bills, reclassifications of existing discretionary spending to mandatory, or enactment of new user fees to offset existing spending" in coming up with the cuts. 

He also asks agencies to prioritize spending that will help the economy.

The debt-ceiling deal caps discretionary spending and achieves $917 billion in deficit reduction over 10 years, starting with a $7 billion cut in overall spending in 2012.