Budget cuts face hurdles

The Straits Times
Dec 9, 2008 | 8:10 AM
Budget cuts face hurdles

WASHINGTON - PRESIDENT-ELECT 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 (S$4.52 trillion) budget are off limits.

Even Mr Obama's Democratic allies in Congress are bracing to defend farm subsidies, weapons systems and projects that benefit their home districts.

'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,' Mr 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, Mr 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 that simply cannot be cut, including interest on the national debt, which ran $451 billion (S$679.8 billion) for the past budget year.

Other programmes, 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.

The government pension program Social Security, the so-called third rail of politics - 'touch it and you 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 programme 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 Mr Bush's defence secretary, Mr 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.

Describing the team's approach, the official said it wouldn't be credible to claim Mr 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 programmes? No way. Food stamps, which are given to low-income people money to buy groceries? Fat chance. Homeland security? Nope.

What's left to trim? An amalgam of domestic programs like education aid, housing, welfare, farm subsidies and highway construction. Most of such programmes are funded each year by Congress through appropriations bills for specific agencies.

But Mr Obama's allies in Congress have been protecting many of these domestic programmes from attacks by President George W. Bush over his two terms in the White House.

Mr Bush has repeatedly tried to 'zero out' or significantly cut programmes such as clean water grants, grants to nonprofit groups that help the poor, a food programme aimed at low-income seniors and grants to help states keep illegal immigrants convicted of felonies in jail. -- AP