Orszag asks agencies to trim costs

The Obama administration sought to show its seriousness about tackling the deficit Tuesday, even as labor leaders and liberal Democrats called for more stimulus spending.

The White House wants non-security federal agencies to list wasteful programs and produce budgets for fiscal year 2012 that cut spending by 5 percent.

While the move doesn’t necessarily mean the agencies will make the cuts, they will have to come up with a list of programs that aren’t performing well. The move is aimed at helping President Barack Obama achieve his goal of freezing all federal non-security discretionary spending through 2013 while still leaving enough money for new needs and priorities, White House Budget Director Peter Orszag said.

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“It’s the beginning of the process, not the end,” he said.

The White House push to identify wasteful measures and devise more restrained budget blueprints comes as Democrats in Congress and their liberal allies struggle over rising deficits and a still-struggling labor market.

Rep. Raul Grijalva (D-Ariz.), the co-chairman of the Congressional Progressive Caucus, said he was “leery” of “across-the-board cuts” that could affect safety-net programs.

“I understand the need to be mindful of the deficit,” he said. “I just wish it would have been surgical.”


Orszag has stressed that the search for more spending reductions would focus on under-performing programs and that some agencies could see increases in spending.

Still, Grijalva warned that pressing for further cuts could complicate negotiations among Democrats over a budget resolution for 2011. Grijalva has pushed back against a budget proposal pushed by fiscally conservative Blue Dog Democrats for a 2 percent cut on non-security discretionary spending. House leaders said they’re still considering their budget options.

A top labor leader on Tuesday called for increased deficit spending, the kind that freshmen and conservative Blue Dog Democrats in the House have recoiled at in recent weeks.

“We do not have a short-term deficit crisis in this country,” said AFL-CIO President Richard Trumka at a forum of prominent liberals in Washington. “We do have a short-term jobs crisis.”

Trumka and others on the left have pushed for an extension of unemployment benefits and an infusion of $23 billion in aid to state and local governments to stave off teacher layoffs.

Freshman Democrats and Blue Dogs in the House worried about the rising $13 trillion debt have started to give greater scrutiny to more spending proposals. They forced House leaders last month to reduce the cost of a nearly $200 billion measure that would have extended jobless benefits, Medicare doctor payments, Medicaid aid to states and other expiring tax provisions. The stripped-down bill would cost $115 billion and passed just before the Memorial Day recess on a 215-204 vote.

A similar measure is being debated on the Senate floor this week.

Orszag on Tuesday described an attempt to pit deficit reduction as mutually exclusive from job creation as a “false choice.”

“We face very clear and substantial deficits: a near-term jobs deficit [...] and a medium- and long-term [fiscal] deficit that would ultimately cause a crisis if not addressed,” he said.

“We ignore either of those problems at our peril.”

Republicans have used the debt numbers — expected to grow by nearly $1 trillion annually for the next decade — to hammer Democrats.

Rep. Paul Ryan (Wis.), the top House Budget Committee Republican, said he’s “hopeful” federal agencies will heed Orszag’s call to cut spending but added that the proposed reforms didn’t go far enough.

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“I welcome any and all efforts that recognize the urgent need to get Washington’s fiscal house in order,” Ryan said in a statement.

“Yet, like their elusive quest for jobs, this Congress and this administration’s search for savings has produced plenty of rhetoric with abysmal results. While the administration calls on executive agencies to trim their budgets starting in October 2011, Congress has made no attempt to even offer a budget for the upcoming fiscal year.”

Michael O’Brien and Kevin Bogardus contributed to this story.

This story was originally posted at 11:45 a.m. and updated at 7:13 p.m