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Orszag, White House Tout Budget Cuts

By Matthew Yglesias on June 8, 2010 at 9:57 am

"Orszag, White House Tout Budget Cuts"

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Lori Montgomery offers a preview in the Washington Post of ideas we’re expecting OMB Director Peter Orszag to discuss in more detail at a CAP event later this morning:

The White House is directing agencies to develop plans for trimming at least 5 percent from their budgets by identifying programs that do little to advance their missions or President Obama’s agenda.

The request, made amid rising public anxiety over government spending, comes on top of a pledge by Obama this winter to freeze spending at most agencies for the next three years. In a joint memo to be delivered Tuesday morning, White House Chief of Staff Rahm Emanuel and budget director Peter Orszag order agency heads to go further by listing the programs that “are least critical” to their overall goals.

A few observations on this:

— The case for cutting or eliminating ineffective programs is always strong.
— That issue is logically independent from the case for reduced overall spending, which is weak in the short term.
— The case for lower-than-projected long-term spending is strong, but this is primarily a matter of health care costs.
— “Defense” and security-related spending can’t be exempt from fiscal scrutiny. Montgomery reports that Defense Secretary Robert Gates “seems to be something of a budget-cutting inspiration for Obama” but the ask here is much bigger in percentage terms that anything Gates has proposed for the Pentagon.
— It’s never a good idea to just look at “spending” without scrutinizing tax expenditures.

Which is all just to say that I believe in what we at CAP call doing what works and not doing what doesn’t work. But I don’t like to see the objective of trimming or eliminating ineffective programs run together with with discussions of fiscal policy as a macroeconomic matter. It’s also worth noting that though the concern in public opinion about wasteful government spending is very real, it’s not clear that the public’s idea of “waste” corresponds very closely to a wonk’s conception of an ineffective program. People tend to like programs that they think benefit them, or people like them, and view other programs as wasteful. What’s more, bad economic times erode faith in public institutions and make people more inclined to see programs as wasteful. That’s really a different issue from the wonk’s worry about programs that don’t work well.

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