US Budget constraints limit Barack Obama's second-term agenda

Jan 19 2013, 13:52 IST
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The Obama administration last year proposed $5.2 billion in discretionary spending cuts. (Reuters) The Obama administration last year proposed $5.2 billion in discretionary spending cuts. (Reuters)
SummaryThe Obama administration last year proposed $5.2 billion in discretionary spending cuts.

the economic mobility of disadvantaged people, many, if not most, would be there," said Jared Bernstein, a former economic adviser to Vice President Joe Biden.

The White House estimates that nonmilitary discretionary spending will shrink from 4.3 percent of the economy in the fiscal year that ended on Sept. 30, 2011 to 2.8 percent when he leaves office in January 2017. That would be the lowest level since the government began keeping track in 1962.

An automatic cut due to take effect in March, known as the "sequester," will slash discretionary spending another 8 percent unless Democrats and Republicans agree on a way to head it off.

Obama frequently invokes the spending caps to rebut Republican charges that he does not care about reducing trillion-dollar deficits. He proposed another $100 billion in non-military discretionary cuts during his fiscal-cliff talks last month with Republican House of Representatives Speaker John Boehner.

But he also warns that deep program cuts will undermine future competitiveness. "The cuts we've already made ... mean that we spend less as a share of our economy than has been true for a generation," he said at a news conference on Monday. "And that's not a recipe for growth."

The White House says it will be able to work within the spending caps to prioritize the areas it cares about most.

But experts with experience in federal allocations say it will be exceedingly difficult to carve out room from other budget areas.

MORE PRISONS, MORE TAX EXAMINERS

The Census Bureau predicts the U.S. population will grow by 12.5 million over the coming four years. That will place increased demands on the government, requiring many agencies to boost staffing to avoid a performance downgrade, Lilly said.

The FBI, for example, will need more crime fighters, and the IRS will need more tax examiners. Increased highway traffic will degrade roads more quickly, and increased air traffic will require more air traffic controllers.

The Bureau of Prisons will face greater costs as it expects the federal inmate population to rise 8 percent in the next four years, while the Veterans Administration will see mounting health-care costs with an aging veterans population.

Some technology-intensive agencies like the National Weather Service may save money through automation, said Joe Minarik, a top budget official under former President Bill Clinton. But others, like the Social Security Administration, will find that more powerful computers won't necessarily boost productivity.

"You've just doubled the speed of the computer behind me, but

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