Obama to propose $17 billion in budget cuts

President Obama on Thursday will propose a detailed fiscal year 2010 budget that reduces or eliminates 121 programs to save an additional $17 billion, the New York Times reports (Calmes, New York Times, 5/7).

Of the $17 billion in proposed savings, $11.5 billion comes from discretionary spending while the rest comes from spending on entitlement programs, according to the Washington Times (Dinan, Washington Times, 5/7).

Peter Orszag, director of the White House Office of Management and Budget, said that the $17 billion in proposed savings will be in addition to savings Obama called for in February, which include reductions in a Medicare program (New York Times, 5/7).

Protest over some of the targeted programs has started. For example, liberal groups are concerned about a proposed partnership with state governments to expose fraud in joint state and federal programs, such as Medicaid and CHIP (Weisman, Wall Street Journal, 5/7). Budget analysts say that it is unlikely that many or any of the programs targeted would be terminated because nearly every program has some support in Congress and "lawmakers from both parties routinely ignore" budget cut proposals from presidents, the Washington Post reports. Still, Obama administration officials believe that given the mounting deficit, the proposed cuts will be taken more seriously, according to the Post (Montgomery/Goldstein, Washington Post, 5/7).

According to the New York Times, some lawmakers are urging the administration to take aim at entitlement programs -- including Medicare, Medicaid and Social Security -- to counter large projected deficits. Administration officials say that that cost-saving proposal to reform the U.S. health care system will lead to a reduction in Medicare and Medicaid spending (New York Times, 5/7). A senior administration official said that the $17 billion proposed budget cut "is an important first step but it's not the end of the process. We will continue to look for additional savings" (Washington Post, 5/7).

Commission for Overhauling Entitlement Programs Proposed

In related news, Senate Homeland Security and Government Affairs Chair Joseph Lieberman (I-Conn.) and Sen. George Voinovich (R-Ohio) on Wednesday introduced a bill that would create a bipartisan commission to examine entitlement program reform and changes to the tax code. The 20-person commission would include the OMB director, Treasury Department Secretary, the chairs and ranking members of the House Ways and Means Committee and Senate Finance Committee, and others appointed by congressional leaders. The commission would hold six town hall meetings across the U.S., report the findings to Congress, and 60 days later would submit a legislative proposal that would be subject to a vote in another 60 days. Reps. Jim Cooper (D-Tenn.) and Frank Wolf (R-Va.) have introduced a companion bill in the House (CongressDaily, 5/7).