Promises, promises: Obama budget cuts face hurdles

[December 09, 2008]  WASHINGTON (AP) -- Barack Obama promises a line-by-line scrub of the federal budget to root out wasteful programs. But as a practical matter, entire chapters of the $3 trillion federal budget are off limits -- and the president-elect's Democratic allies in Congress are bracing to defend farm subsidies, weapons systems and home-state pork barrel projects.

"We cannot sustain a system that bleeds billions of taxpayer dollars on programs that have outlived their usefulness, or exist solely because of the power of a politician, lobbyist or interest group," Obama said when introducing budget director Peter Orszag two weeks ago. "We simply cannot afford it."

Indeed, with the federal budget deficit at a record level and heading higher, Obama is committed to identifying savings to slow the red ink. Not to mention finding a way to pay for big spending increases for programs he promised in his presidential campaign.

But there are some costs you simply can't cut, including interest on the national debt, which ran $451 billion for the past budget year.

Other programs, especially benefits like health care, are politically perilous to cut. These huge pieces the federal pie get trimmed only rarely -- and usually as part of a bipartisan agreement.

Social Security, the so-called third rail of politics -- "touch it and die," the saying goes -- cost $658 billion in fiscal 2008. Medicare, the health care program for the elderly, cost $461 billion, while Medicaid, a companion program for the poor and disabled, ran $201 billion. They face huge long-term budget problems but lawmakers have been reluctant to take them on in recent years.

And while most experts say the $657 billion Pentagon budget is riven with waste, especially in procurement of new weapons systems, cutting it in a time of war isn't easy -- especially for a new Democratic president with little national security experience. The fact that Bush's defense secretary, Robert Gates, is staying could make it more difficult.

"Obama said he was going to go through the whole federal budget line by line," said Winslow Wheeler of the Center for Defense Information think tank. "Well, Robert Gates just did that,and his finding was to increase the budget by $57 billion."

But a member of the Obama transition team, who would describe the situation only on condition of anonymity, says nothing will be considered off the table, at least for discussion, especially Pentagon waste. A good place to start might be expensive, high-tech weapons systems like the F-22 Raptor, jet fighters that cost $191 million each and don't fit into the military's focus on counterinsurgency.

"It's truly a no-brainer to cease production of the F-22," Wheeler said.

Describing the team's approach, the official said it wouldn't be credible to claim Obama was going to try to get a handle on the budgetary situation without taking on Pentagon spending.

Still, there are numerous programs that simply won't feel the knife.

Veterans programs? No way. Food stamps? Fat chance. Homeland security? Nope.

What's left to scrub?

An amalgam of domestic programs like education aid, housing, welfare, farm subsidies and highway construction. Most of such programs are funded each year by Congress through appropriations bills for specific agencies.

But Obama's allies in Congress have been protecting many of these domestic programs from attacks by President George W. Bush over his two terms in the White House. Bush has repeatedly tried to "zero out" or significantly cut programs such as clean water grants, grants to nonprofit groups that help the poor, a food program aimed at low-income seniors and grants to help states keep illegal immigrants convicted of felonies in jail.

"You may be able to put together some savings from cutting back on existing programs," said former California Rep. Leon Panetta, President Bill Clinton's first budget director. "The problem you run into is usually on Capitol Hill, where every one of those programs usually has someone or a committee or subcommittee that protects them, and so actually delivering on those savings becomes much more of a question mark."

The ability of lawmakers in both political parties to rebuff cuts to favored programs simply can't be underestimated. And bureaucratic warfare between the White House's Office of Management and Budget and Cabinet departments like Defense often doesn't get resolved in OMB's favor.

When promising the budget overhaul, Obama identified $49 million in overpayments over three years to wealthy farmers. That's a tiny amount. Possible other targets such as abstinence education, a favorite program of Republicans, are but a drop in the bucket.

"We can identify wasteful programs and we can add them up, and believe it or not it's only a little bit of money in the scheme of things," said Richard Kogan, a senior fellow with the Center of Budget and Policy Priorities, a liberal think tank.

Still, even skeptics say it's a worthwhile exercise, especially at the beginning of a new administration.

"We will go through our federal budget -- page by page, line by line -- eliminating those programs we don't need, and insisting that those we do operate in a sensible cost-effective way," Obama has said.

Just don't expect immediate miracles.

Said the Obama transition official: "This is the first step in a very long process in which, over the next four years, we try to regain control over what it is the federal government is doing."

[Associated Press; By ANDREW TAYLOR]

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