Cutting $100 Million


In his weekend radio address, President Obama said: “If we’re to going to rebuild our economy on a solid foundation, we need to change the way we do business in Washington. We need to restore the American people’s confidence in their government – that it is on their side, spending their money wisely, to meet their families’ needs.

“That starts with the painstaking work of examining every program, every entitlement, every dollar of government spending and asking ourselves: Is this program really essential? Are taxpayers getting their money’s worth? Can we accomplish our goals more efficiently or effectively some other way? “

. . . . Finally, in the coming weeks, I will be announcing the elimination of dozens of government programs shown to be wasteful or ineffective. In this effort, there will be no sacred cows, and no pet projects. All across America, families are making hard choices, and it’s time their government did the same.

He held his first cabinet meeting yesterday, using the occasion to highlight the need to cut questionable spending.  He  challenged his cabinet secretaries to cut $100 million in unnecessary administrative costs over the next 90 days. He gave some pretty interesting examples of the kinds of cuts they should look for, including reducing the number of conferences held, purchasing office supplies in bulk, etc. He said that this would be “separate and apart from the work that Peter Orszag and the rest of our team are doing to go line by line with the budget and identify programmatic cuts that need to be made.”

He recognized that $100 million was largely symbolic, given that the deficit in March 2009 alone was $192 billion, but it was a first step in restoring citizen confidence in government.

However, doing this smartly will matter.  Administrative costs are generally tight in most agencies and cutting them oftentimes means cutting investments in employee training and travel. This is not uncommon.  But cutting administrative expenses this year could be a real challenge: many agencies receiving Recovery Act funding (for example, the General Services Administration received a 1,130 percent increase in its budget) did not receive sufficient increases in administrative support to handle the influx of work . . . and now they’re being asked to cut their administrative costs.


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