Obama trims budget to save $17 billion

US president Barack Obama unveiled on Thursday a series of spending cuts aggregating $17 billion from the proposed 2010 budget and vowed to save more in the future.

Many of the cuts were already announced after the presentation of the record $3.55 trillion federal budget in February with a deficit of $1.17 trillion, or 8 per cent of the projected GDP for the fiscal year 2010 beginning this October.

Obama said, "We can no longer afford to spend as if deficits don't matter and waste is not our problem."

"There is a lot of money being spent inefficiently, ineffectively, and - in some cases - in ways that are actually pretty stunning," Obama remarked.

The cuts suggested by the Obama administration is a meagre 0.5-per cent of the Congress-approved federal budget of $3.44 trillion. The Congress earlier rejected some of those proposals on the grounds that they do too little to contain the huge budget deficit.
 
Peter Orszag, White House budget director expressed the need for more savings.

The White House announced 121 government programmes for elimination or cut back which would result in a saving of $17 billion, splitting more or less evenly between defence and non-defence spending.

The identified programmes include $142 million in payments to states for clean up of abandoned mines, $35 million radio navigation system which has become obsolete, $632,000 for education office in Paris, trimming of terrorism risk insurance programme which would save $21 million, abolishing tax breaks of oil and gas industries which would yield $26 billion in a decade, an early childhood education programme, some healthcare subsidies, etc.

It also covers scraping of the plan for a new presidential helicopter and elimination of the upgradation of the so called ''Marine-One'' programme.

"These savings, large and small, add up," said the president.

''None of this will be easy,'' Obama said. "For every dollar we seek to save there will be those who have an interest in seeing it spent. That's how unnecessary programmes survive year after year. That's how budgets swell. That's how the people's interest is slowly overtaken by the special interests."

The Republicans are of the view that the suggested cuts are not enough to carve down a deficit of $1.38 trillion projected recently by the Congress budget office.

John Boehner, House Republican leader said: "The resulting savings are relatively minor compared with the government's fiscal woes. While we appreciate the newfound attention to saving taxpayer dollars from this administration, we respectfully suggested that we should do far more."

Nevertheless, the proposed cuts are likely to be challenged by the members of the Congress who support the identified schemes.

In 2008, president Bush proposed the abolition or curtailment of 141 government programmes of which only 29 were approved by the Congress resulting in a saving of a meagre $1.6 billion.

Obama reiterated that he intend to bring down the budget deficit by 50 per cent by the end of his first term in office.

Analysts believe that in the current scenario, the $17 billion appears too scanty compared to the huge government expenses like hundreds of billions dollars a year lost on interest payment on a whopping $11 trillion debt, $94 billion emergency spending on wars, and the huge stimulus packages announced to revive the ailing economy.