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Reducing Unnecessary Spending

OMB Director Peter Orszag explains the Reduce Unnecessary Spending Act of 2010, an innovative package sent to Congress by the President to help break the gridlock on bringing down the deficit.

Cross-posted from the OMB Blog.

Today, the President sent to Congress the Reduce Unnecessary Spending Act of 2010 to establish a new, expedited tool to reduce unnecessary or wasteful spending. Under this new expedited procedure, the President would submit a package of rescissions shortly after a spending bill is passed. Congress is then required to consider these recommendations as a package, without amendment, and with a guaranteed up-or-down vote within a specified timeframe.
The Reduce Unnecessary Spending Act will empower the President and the Congress to eliminate unnecessary spending while discouraging waste in the first place. This is critically important both because we should never tolerate taxpayer dollars going to programs that are duplicative or ineffective and because, especially in the current fiscal environment, we cannot afford this waste.
Indeed, the expedited rescission authority in the Reduce Unnecessary Spending Act would be particularly effective in reining in programs that are heavily earmarked or not merit-based as well as those that are plainly wasteful and duplicative. For instance:

  • The State Assistance Grants for Water Infrastructure at the Environmental Protection Agency currently consists of $157 million in non-merit-based, earmarked funding instead of being allocated through the regular formula allocation process.
  • The Department of Transportation was given $293 million for earmarked surface transportation projects that also circumvent formula grant funding.
  • The Department of Commerce was allocated $20 million and the USDA was given $5 million to fund public broadcasting even though this activity is ably supported through the Corporation for Public Broadcasting.
  • The Department of Housing and Urban Development was allocated $17 million for the Brownfields Economic Development Initiative, a worthy goal that duplicates the function of the CDBG program.

The Reduce Unnecessary Spending Act of 2010 alone is not enough to cut waste, streamline government operations, and create a government that is more responsive to the American people. Rather, it is part of a larger effort the President has undertaken to rein in wasteful spending. This effort includes: the $20 billion in terminations, reductions, and savings the President included in both his budgets; our work with Congress to curb earmarks; the signing into law of statutory PAYGO; the Administration-wide effort to curb the $100 billion in improper government payments; and the three-year freeze on non-security discretionary funding that the President put forward in the FY 2011 Budget.
We look forward to working with Congress in passing the Reduce Unnecessary Spending Act and creating a government that is effective and efficient.

Peter R. Orszag is Director of the Office of Management and Budget