Nickel and Diming

On the budget, President Obama sounds a lot like candidate McCain.

Even before President Obama stepped to the lectern this morning to announce that he was cutting $17 billion from the federal budget, a fight was raging. The president and his aides argued that the cuts are significant. Only in Washington, they said, would people think $17 billion was not very much money. Press secretary Robert Gibbs even offered to take skeptical reporters onto Pennsylvania Avenue to ask regular people if $17 billion was a lot of money.

But members of the press—and anyone else, for that matter, who has spent any time studying the federal budget—know that $17 billion in a $3 trillion budget is, in fact, a small number. Relative to the overall budget, $17 billion is just 0.5 percent. And Congress isn’t likely to embrace all of those cuts, while Obama is also expanding programs elsewhere, so the $17 billion figure is not even a net reduction. Last year President Bush proposed cutting 151 programs for $34 billion in savings. “This creates this veneer of fiscal responsibility when the budget is moving rapidly in the wrong direction,” said Robert Bixby, the executive director of the Concord Coalition, a nonpartisan budget watchdog group. (It was not overly enamored of Obama’s cuts, either.)

But this spat is beside the point. Or maybe for the administration the spat is precisely the point. It helps enlarge the president’s relatively modest act of deficit reduction. Instead of having a conversation about whether the cuts do anything to solve the problem they’re intended to solve, Obama can have a debate about whether $17 billion is a big number. This is an eminently winnable debate, because as Gibbs notes, compared with the amount of money most “regular people” see in their lifetimes, $17 billion is a big number. Still, everything is relative. Compared to my dining nook, the Pentagon cafeteria is huge. But closing it wouldn’t save the federal government much money. Also, this debate puts the president on the other side of unpopular institutions like the GOP and journalists. Portraying yourself as the embodiment of common sense never hurts a politician.

What’s notable here is that Obama is asking us to play small ball. Normally, he takes the opposite approach. His central quality—celebrated repeatedly last week in the 100th-day extravaganza—is that he knows how to put things in their larger context. Obama’s the guy who stays cool and steady when other people get exercised about small things. And, in fact, he has played exactly this role before when discussing the federal budget. Dismissing Sen. John McCain’s pledge, during last fall’s campaign, to rid the budget of earmarks, Obama noted (accurately) that “earmarks account for about $18 billion of our budget.” More recently, he rightly chided Republicans for overemphasizing the deficit-reducing power of cutting back his nearly $800 billion stimulus plan.

So why is Obama playing small ball? He’s got to show he cares about the deficit. Despite his high approval rating, the American people are worried about the enormous budget deficit he’s creating. In the recent Wall Street Journal poll, it was their second biggest concern. In a recent Pew poll, 50 percent approved of his handling of the budget deficit, 10 points below the percentage who approve of his handling of the economy more broadly. If he can convince them he’s really going to go after the budget deficit, voters will more readily tolerate his expensive spending programs that will be debated in the coming months.

Obama is hardly oblivious to the larger parts of the budget that could be modified to find savings. He and his budget director, Peter Orszag, argue so passionately for health care reform because they say it’s the only way to tackle growing deficits. Obama also continues to talk about reforming Social Security, an unpopular topic in many quarters, including in his own party.

But these larger prizes will take time to attain and will require unpopular choices. In the meantime, it’s more effective to emphasize smaller savings now than rely on future promises. Maybe Obama can ask his former opponent to help him make his case.