Obama Seeks New Power to Cut Spending

Posted May 24, 2010 at 12:28pm

President Barack Obama is preparing to send Congress legislation that would grant him new authority to slash federal spending, including earmarks — a move that’s already drawing cheers from fiscally conservative Democrats but one that’s also likely to send fractures throughout the party.

In a Monday conference call with reporters, Office of Management and Budget Director Peter Orszag said the Reduce Unnecessary Spending Act would allow the president to submit a package of rescissions after a spending bill is passed. Congress would have to consider the recommendations as a package, without amendment, and with a guaranteed up-or-down vote within a specified time frame.

The proposal is “not a panacea, but an important tool” for reducing wasteful spending, Orszag said. This approach to cutting spending is “significantly different,” he said, because it is “fast-tracked, very transparent, and no amendments are permissible.”

Orszag gave examples of items susceptible to being stripped under this authority from the last budget: $293 million for the Transportation Department for earmarks that circumvent formula grant funding and $20 million for the Commerce Department to fund public broadcasting, since it already receives funding separately.

Asked how much Obama is looking to reduce, Orszag said the administration proposed about $20 billion in cuts in the 2010 budget, of which only 60 percent were enacted by Congress. The issue at hand is “calibrating the other 40 percent of what we proposed,” he said.

Orszag said another benefit to the effort is that Congress “may be reluctant” to enact unnecessary spending just knowing that the president has such authority.

House Budget Chairman John Spratt, a past co-sponsor of legislation on expedited rescission authority, has already announced that he will introduce the administration’s bill later this week.

“We will weigh the administration’s version of expedited rescission carefully and see what changes we may want to make. In the meantime, today’s proposal is welcomed as a step forward on the path to fiscal responsibility,” the South Carolina Democrat said.

But gauging by past Democratic support for such initiatives, Obama may have a major battle in store for him: A 2006 vote on similar legislation passed with only 35 Democrats voting for it. Only 15 Republicans opposed it — including Appropriations ranking member Jerry Lewis (R-Calif.) — as did Speaker Nancy Pelosi (D-Calif.) and House Majority Leader Steny Hoyer (D-Md.).

Pelosi issued a statement Monday saying only that she is “committed to fiscal discipline” and that Democratic leaders “look forward to reviewing the president’s proposal.”

Fiscally conservative Blue Dog Democrats, meanwhile, praised the president for leaning on expedited rescission authority to cut spending, which they have advocated in their budget blueprint.

“If history is any indication, we know that restoring fiscal discipline to the federal government means putting strong budget enforcement tools in place. Like statutory PAYGO, expedited rescission is one of those tools,” said Rep. Jim Matheson, a Blue Dog co-chairman.

The Utah Democrat said Congress now has “a responsibility to work together to see that this important legislation ultimately reaches the president’s desk.”

Sen. Russ Feingold (D-Wis.), a co-author of bipartisan legislation similar to what the administration is proposing, will chair a Judiciary subcommittee hearing Wednesday on the issue and take testimony from OMB Acting Deputy Director Jeffrey Liebman.

“The administration’s proposal appears to be constitutional and would be a useful tool to help eliminate wasteful spending. I look forward to exploring the administration’s proposal during Wednesday’s hearing and working with the administration, as well as Members from both parties, to advance this legislation and better safeguard taxpayer dollars,” Feingold said.

House Republican leaders were already bashing Obama for not cutting spending now.

“We’re pleased President Obama is interested in demonstrating fiscal discipline, but he already has the authority to force Congress to consider spending cuts immediately, and Republicans have been inviting him to use it for months,” House Minority Leader John Boehner (R-Ohio) said.

House Minority Whip Eric Cantor criticized the president for having “ignored multiple requests” from GOP leaders to work together on spending reduction measures.

“Most recently, the president didn’t respond to our offer to partner on a spending cut effort using the rescission authority already granted to him. Now, perhaps after watching the massive public fervor for YouCut, it looks like the president is willing to reconsider, and that is a positive step,” the Virginia Republican said.