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

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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.

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 the elderly person on the other side of the desk is not speaking any faster," Minarik said.

Others say the Obama administration needs to show a greater willingness to cut ineffective programs.

"It seems incapable of producing budgets that identify program areas that don't work. Everything works for these people," said Jim Dyer, a former top Republican staffer on the House Appropriations Committee.

The Obama administration last year proposed $5.2 billion in discretionary spending cuts, and another $3.3 billion from defense. Because Congress has not passed any spending bills for the fiscal year that started last October, those cuts have not had a chance to become law. But many of them have already been rejected by Obama's Senate allies.

The White House also tried to shift some highway programs out of the discretionary category, which would have freed up $44.5 billion over a 10-year period. Congress also rejected that idea and opted to fund highway spending with discretionary funds for at least another two years.

Many budget experts expect Congress will ultimately conclude that the spending caps are too severe to work. The drive to cut spending could abate in coming years as well if an expanding economy boosts tax revenues and narrows budget deficits.

But meanwhile, Obama will have few resources to implement his economic vision.

"When I hear an aggressive agenda for investment, given the numbers we're looking at under the Budget Control Act I tend to be highly skeptical," Minarik said.

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