Obama vows to cut waste in programs

CHICAGO – President-elect Barack Obama delivered a message Tuesday that even as the nation girds for a major stimulus package meant to “jolt” the economy out of its downturn, he will be a careful custodian of the budget, eliminating wasteful spending such as millionaire farmers getting federal crop subsidies.

That type of federal outlay “is a prime example of the kind of waste that I intend to end as president,” Obama told reporters at a hotel in downtown Chicago, as he introduced Peter Orszag as his nominee to head the Office of Management and Budget. Orszag, educated at Princeton and the London School of Economics, headed the Congressional Budget Office, which analyzes budget issues.

But for Obama and Orszag to achieve any substantial savings, they will need to confront the whopping chunk of the budget that got little attention in the news conference: massive entitlement programs covering Social Security and health care.

Budget experts applauded Obama’s plan to subject federal spending to rigorous scrutiny. The president-elect vowed to scour the budget for inefficiencies, using common sense criteria for what should be preserved or discarded.

“We are going to go through our federal budget, as I promised during the campaign, page by page, line by line, eliminating those programs we don’t need and insisting that those that we do need operate in a sensible, cost-effective way,” Obama said.

Such a promise “is music to my ears – an absolute symphony,” said Isabel Sawhill, a senior fellow at the Brookings Institution and an official in the Office of Management and Budget in the Bill Clinton administration.

Yet for Obama to contain costs in a period of swelling deficits, he’ll need to make his review as expansive as possible, experts said. That means targeting not just scattershot discretionary programs, but the entitlement spending that accounts for about 54 percent of the $3 trillion federal budget. Curbing the cost of popular entitlements like Social Security is a risky political step. And Obama made no specific mention of Social Security or other such programs at his news conference.

“If we’re forecasting deficits of something in the neighborhood of a trillion dollars, and you think you can scrub the budget and find a trillion dollars, you can’t,” Sawhill said.

She added that Obama’s plan “needs to be done. But I would add that you’ve also got to tackle the large entitlement programs such as Social Security, Medicare and Medicaid.”

An Obama aide said later in the day that Obama’s review will encompass Social Security, Medicare and other popular programs.