President’s Address to Congress & Rahm Emanuel Signals Deep Defense Spending Cuts

February 25th, 2009 - by admin

President Barack Obama & Chris Bowers / Open – 2009-02-25 22:52:57

President Obama’s Address to Congress

(February 24, 2009) — The following is excerpted from a transcript of President Obama’s address to a joint session of Congress on Tuesday, as recorded by CQ Transcriptions.

Yesterday, I held a fiscal summit where I pledged to cut the deficit in half by the end of my first term in office. My administration has also begun to go line by line through the federal budget in order to eliminate wasteful and ineffective programs.

As you can imagine, this is a process that will take some time, but we have already identified $2 trillion in savings over the next decade. In this budget…

In this budget, we will end education programs that don’t work and end direct payments to large agribusinesses that don’t need them. We’ll eliminate the no-bid contracts that have wasted billions in Iraq… and reform our defense budget so that we’re not paying for Cold War-era weapons systems we don’t use. We will root out — we will root out the waste and fraud and abuse in our Medicare program that doesn’t make our seniors any healthier. We will restore a sense of fairness and balance to our tax code by finally ending the tax breaks for corporations that ship our jobs overseas.

In order to save our children from a future of debt, we will also end the tax breaks for the wealthiest 2 percent of Americans.

Rahm Emanuel Signals Deep Defense Spending Cuts
Chris Bowers / Open

(January 21, 2009) — One of the stories we have been following on Open Left since the election is the question of defense spending under the Obama administration. Public opinion is open to cuts, and Obama’s positioning on the matter, while mixed, has still been generally positive.

Now, White House Chief of Staff Rahm Emanuel is signaling that not only will there be defense spending cuts, but that those cuts will be deep. Via commenter The Big Hurt, consider recent statements by Emanuel on Meet the Press (more in the extended entry):

What you see here — and the president has always said that we must have an approach to spending money differently and respect for the taxpayers’ dollars, and do it in a more efficient way and in a different way. And most importantly, we must deal with the long-term challenges that face this country.

So while he has talked about the need — and everybody I think from economists on the left to economists on the right realize that we must make critical investments at this time. And yes, they’ll add to our obligation. It has got to be coupled with a serious attack about putting our fiscal house in order. And for too long that hasn’t happened. Challenges that needed to be met, responsibilities that needed to be met have not. So from the era — from the area of, let’s just say, in the defense area.


On an annual basis we have about $300 billion in cost overruns. That must be addressed, and we will be addressing it. Area of subsidies to corporate America, that must be addressed. And then also, dealing with the bigger obligations of health care costs and their — and what they have done to the federal budget.

What is particularly revealing, and exciting, about this passage is that Emanuel not only clearly implies cuts in defense spending are coming, but he places an actual number on it: “about $300 billion.” Further, this figure does not even seem to include money that will be saved by withdrawing troops from Iraq, as Emanuel’s language is focused on “cost overruns.”

Withdrawing from Iraq, and cutting $300 billion in other defense spending, would wipe out the increases in military spending under the Bush administration. It would even reduce military spending to a smaller percentage of the federal budget than it was during the Clinton administration.

Making the public spending aspects of the stimulus plan permanent, cutting defense spending and ending the Bush tax cuts would collectively serve as a an even more progressive re-arrangement of federal spending than President Clinton’s 1993 budget.

Expand the public expenditure parts of the stimulus, and start running TARP better (more foreclosure mitigation, higher ownership stake in the companies receiving the money, higher rate of return on the preferred stock), and we might be getting close to what Paul Krugman has called a post-bubble re-organization of the economy.

Now, I don’t expect that the Obama administration will cut $300 billion in defense spending right off the bat. For one thing, the political backing for the military-industrial complex is staggering, and it won’t tolerate any cuts lightly.

Second, Robert Gates is still running the Pentagon, so it might be difficult to reduce cost overruns if the management hasn’t changed.

Third, Emanuel could simply have been using a large number for the purpose of sounding serious about reducing spending, and the actual targeted cuts might be lower.

Still, Emanuel’s comments provide ample reason to be optimistic about reductions in the military-industrial complex during the Obama administration. This is an area where we need to keep beating the drum, and help make cuts the Obama administration apparently desires into a more achievable political reality.

Update: I removed the ellipses. Still looks like he is talking about defense to me. Especially since he says the same thing in a recent interview with Charlie Rose (see about 20:30 into the interview).

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