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WASHINGTON (AP) — It’s a microcosm of the budget battling that has
consumed Congress all year: The Obama administration wants federal
agencies to save money while Republicans push for additional
savings to take a substantial bite out of the government’s towering
pile of IOUs.
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White House budget chief Jacob Lew has ordered agency heads to
submit spending plans for the upcoming budget at least 5 percent
below this year’s levels. He also wants them to propose ways to
trim a total of at least 10 percent of their spending.
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Michael Steel, a spokesman for House Speaker John Boehner, R-Ohio,
said Thursday that Lew’s directive was a good way to start finding
spending cuts that are required under the recent debt-ceiling
agreement between the two sides.
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“But the White House must get serious about real structural reform
of our entitlement programs if we’re going to get our debt under
control to help our economy grow and create jobs,” Steel said,
referring to huge and fast-growing benefit programs like Social
Security and Medicare that help drive annual deficits
skyward.
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Lew’s letter did not rule out, or even address, the possibility of
finding savings from benefit programs. But Steel’s remark pointed
directly at the major fault line that has blocked a sweeping
debt-cutting deal between the two parties: Democrats have resisted
paring benefits from Social Security, Medicare and Medicaid, while
Republicans have refused to consider tax increases.
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The Obama administration has asked agencies in years past to
propose similar savings. But Lew’s order comes just two weeks after
Obama and congressional Republicans ended an epic debt ceiling
battle that has left both sides eager to demonstrate a willingness
to trim red ink ahead of a fierce autumn battle over the economy
and the debt and just as the 2012 presidential and congressional
elections approach.
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By requesting two sets of potential savings from agencies, Lew is
moving toward fulfilling the debt-ceiling deal, which created a
series of annual spending targets and would save tens of billions
of dollars a year.
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“By providing budgets pegged to these two scenarios, you will
provide the president with the information to make the tough
choices necessary to meet the hard spending targets in place and
the needs of the nation,” Lew wrote to agency heads.
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The American Federation of Government Employees, which represents
more than 625,000 federal workers and employees of the District of
Columbia, also jumped into the fray.
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In a written statement, national president John Gage said the cuts
“mean just one thing: more job destruction in the midst of a jobs
crisis.” He said that with millions of Americans already unemployed
or too discouraged to seek work, “why on earth would the
administration be trying to dig an even deeper hole?”
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The spending that Lew ordered federal agencies to trim will consume
more than $1 trillion of this year’s $3.8 trillion federal budget.
The rest of the budget covers benefit programs and interest
payments on the government’s $14.3 trillion debt.
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Lew’s letter suggests that savings can be found by eliminating
unneeded programs and making agencies more efficient. It also
invites agency heads to propose initiatives that would spark
economic growth.
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“Finding the savings to support these investments will be
difficult, but it is possible,” Lew wrote.
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In a White House blog on Thursday, Lew said his request for savings
was designed to help the administration make decisions about living
within overall spending limits. He said it did not mean every
agency will necessarily see budget cuts.
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Republicans say tax and spending cuts are needed to blow life back
into the flagging economy and create jobs. Obama plans to unveil a
jobs proposal next month mixing tax reductions, construction
initiatives and deficit reduction.
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When Congress returns from its summer recess in September, also
generating political heat will be the special bipartisan panel of
12 lawmakers that the debt-ceiling agreement created to try to
craft a compromise $1.5 trillion, 10-year debt reduction
package.
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As another part of the debt-cutting deal, the two sides agreed to a
separate $900 billion in 10-year savings from agency budgets. The
details of those cuts will have to be worked out every year, but
they will be evenly divided between national security and domestic
programs.
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Earlier this year, Obama and Congress also battled down to the wire
over spending cuts and came within hours of forcing a partial
government shutdown. In the end, they agreed to pare agency
spending by $38 billion.
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Lew asked agency chiefs for the two spending scenarios as the
administration plans for the 2013 budget year, which begins in
October 2012. That budget will be released early next
year.
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