As part of his balanced approach to deficit reduction, the President has signed $1 trillion in discretionary spending cuts into law through the Budget Control Act, and his budget calls for more than $340 billion in entitlement savings from Medicare and Medicaid, and $250 billion from other mandatory programs.
THE PRESIDENT HAS SIGNED $1 TRILLION IN DISCRETIONARY CUTS INTO LAW AS PART OF THE BUDGET CONTROL ACT:
President Obama signed into law $1 trillion in cuts to discretionary spending over the next ten years. As part of the 2011 debt agreement the President cut $1,028 billion in discretionary spending through the Budget Control Act. Together with another $676 billion in discretionary savings through annual appropriations bills and interest savings, this will reduce spending by over $2 trillion. As a result, annual discretionary spending is projected to fall to its lowest levels on record, measured as a share of the economy.
Furthermore, President Obama has proposed and signed into law the elimination of 77 government programs and cut another 52 programs, saving more than $30 billion annually. This includes taking a hard look at areas he thinks are very important to see what programs are not working, duplicative or no longer needed—which is why the Administration has eliminated 16 programs in the Department of Education, 10 programs at Health and Human Services, and 4 programs at the Department of Labor.
THE PRESIDENT HAS PUT FORWARD SPECIFIC CUTS IN MANDATORY HEALTH SPENDING:
The President signed into law health savings in the Affordable Care Act that paid for the improving health coverage and reduced the deficit by over $100 billion over a decade. These policies contributed to slowing baseline growth in Medicare and Medicaid to that of GDP on a per capita basis. And, once its policies are fully phased in, the health care law slows the growth in national health spending.
The President has put forward detailed and specific health savings totaling more than $300 billion, all verified by the CBO in their March analysis of the President’s Budget. The health proposals in the President’s budget total to $340 billion according to CBO scoring ($362 billion in the original budget proposal the President put forward, reduced for some changes that went into effect). Some of the Medicare reforms include implementing new Medicare Part D drug rebates for drugs provided to low-income beneficiaries ($137 billion), reducing Medicare payments for bad debts ($24 billion), and increasing income-related premiums for higher-income beneficiaries in Medicare Parts B and D beginning in 2017 ($30 billion).
Larger long-term Medicare savings than Bowles-Simpson. President Obama’s reforms obtain savings from Medicare and Medicaid while protecting their fundamental structure. By 2022, the President’s Medicare proposals save $57 billion per year—slightly more than the $53 billion saved by the Bowles-Simpson proposal. Moreover, the President’s proposed health savings are still phasing in as of 2022, growing at more than 10 percent annually at the end of the window—compared to about 5 percent for Bowles-Simpson, suggesting that the President’s savings will exceed the Bowles-Simpson savings over the next decade.
AND PRESIDENT OBAMA HAS PROVIDED CONCRETE DETAIL ON SAVINGS FROM MANDATORY PROGRAMS OTHER THAN HEALTH:
The President’s budget sets out specific proposals to achieve $250 billion in savings — similar to the amount proposed by Bowles-Simpson — in entitlements and mandatory spending beyond health. Those specific savings include over $30 billion in agriculture subsidies, including ending direct farm payments; and $25 billion from strengthening the Post Office. (See table S-10).
UNDER PRESIDENT OBAMA'S WATCH SPENDING GREW AT THE SLOWEST PACE SINCE EISENHOWER:
Under President Obama’s watch, spending—including the emergency measures in the Recovery Act—grew at the slowest pace since Eisenhower, and far lower than President Reagan’s first term. In the President’s time in office, federal spending has grown at 1.4 percent per year, the slowest pace since Eisenhower, and far lower than the 8.7 percent in President Reagan’s first term.