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By Jay Cost

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Obama's $17 Billion: Important or Really Important?

It was interesting to watch the President insist that $17 billion in spending cuts is significant. The press was not really buying the spin:

[T]he news that the cuts totaled $17 billion "landed with a bit of a thud" in the media. Reporters stressed that the cuts made up "a tiny fraction" of the total budget and that they would be hard to push through; USA Today noted that the "proposed cuts are about one-fiftieth the size of this year's $787 billion economic stimulus package -- all of which was added to the deficit."

I don't blame them. I was reminded of the Presidents first debate with Senator McCain. After the latter once again spoke about earmarks, then-Senator Obama was breezily dismissive, saying:

Well, Senator McCain is absolutely right that the earmarks process has been abused, which is why I suspended any requests for my home state, whether it was for senior centers or what have you, until we cleaned it up.

And he's also right that oftentimes lobbyists and special interests are the ones that are introducing these kinds of requests, although that wasn't the case with me.

But let's be clear: Earmarks account for $18 billion in last year's budget. Senator McCain is proposing -- and this is a fundamental difference between us -- $300 billion in tax cuts to some of the wealthiest corporations and individuals in the country, $300 billion.

Now, $18 billion is important; $300 billion is really important.

And in his tax plan, you would have CEOs of Fortune 500 companies getting an average of $700,000 in reduced taxes, while leaving 100 million Americans out.

So my attitude is, we've got to grow the economy from the bottom up. What I've called for is a tax cut for 95 percent of working families, 95 percent.

And that means that the ordinary American out there who's collecting a paycheck every day, they've got a little extra money to be able to buy a computer for their kid, to fill up on this gas that is killing them.

And over time, that, I think, is going to be a better recipe for economic growth than the -- the policies of President Bush that John McCain wants to -- wants to follow. [Emphasis Mine]

Obama would take basically the same posture in the next two debates - that McCain is talking about something that is not really as important as he makes it out to be.

Today, you could say to the President what he said to Senator McCain last fall: sure, your spending cuts are "important" - but your spending increases are "really important." It's not surprising that journalists weren't buying it.

From the looks of it, Congress is not going to be receptive to these cuts:

President Obama's modest proposal to slice $17 billion from 121 government programs quickly ran into a buzz saw of opposition on Capitol Hill yesterday, as an array of Democratic lawmakers vowed to fight White House efforts to deprive their favorite initiatives of federal funds.

One member objects here. Another objects there. Next thing you know, the cuts start disappearing. That's the big problem with Congress - it's hard to get individual legislators, who are responsible to their particular constituents, to be responsible to the nation as a whole. That's where the President comes in - at least in theory. In practice, it is damned hard to get Congress to behave itself. From the perspective of an individual member, it's hard to be critical. They are responsible to their districts - and if they perceive, as the press seems to, that these spending cuts are just symbolic, why should they go along with them? Symbolic good for the President versus real harm to their states or districts. It'd be tough to side with the White House on that one.

The real question is: will the Obama administration fight to keep these cuts in, or give them up to smooth passage for its bigger initiatives? That will tell us whether it is serious about cutting needless spending, or whether this is just a PR gimmick designed to counter the sticker shock the public will feel for the few days after the budget is released. My guess is that the White House will let most of it go, that this is mostly PR, and that everybody's skepticism about touting $17 billion in cuts amidst a $1.75 trillion deficit is well placed.

-Jay Cost