Skip to Content
Streetsblog USA home
Streetsblog USA home
Log In
Streetsblog Capitol Hill

White House to Agencies: Prepare for Broad Spending Freeze or 5% Cut

Congressional deficit anxiety, always running high amid conservative Democrats, is reaching something of a fever pitch this week -- while the White House prepares to ask most federal agencies for two alternative budgets for the fiscal year that begins next fall: one that freezes spending and one with a 5 percent cut.

dot14_point.jpgU.S. DOT headquarters (Photo: Capitol Riverfront)

The Wall Street Journal has the details, as part of a larger report on the Obama administration's internal debate over whether to set aside unspent financial bailout money for deficit reduction:

The White House is in the early stages of considering what biggermoves it might make for next year's budget. The Office of Managementand Budget has asked all cabinet agencies, except defense and veteransaffairs, to prepare two budget proposals for fiscal 2011, which beginsOct 1, 2010. One would freeze spending at current levels. The otherwould cut spending by 5%.

OMB is also reviewing a host of tax changes. The President'sEconomic Recovery Advisory Board will submit tax-policy options by Dec.5, including simplifying the tax code and revamping the corporate taxcode.

Matt Yglesias tackles the political motivations behind the administration's efforts to project fiscal hawkishness while weighing new initiatives to combat rising joblessness ("without increasing the deficit"). But the signals of coming budget austerity at non-military federal agencies is another huge story in itself, and one that's bound to have significant implications for transportation policy.

The U.S. DOT made a budget request of $73.2 billion for fiscal year (FY) 2010, which began in October, compared with $68.2 billion during the final year of the Bush administration (FY 2009) and $70.3 billion in FY 2008. According to that data, a 5 percent cut would leave the agency's request above its FY 2009 level.

Once budget requests are forwarded to Capitol Hill, lawmakers get the final word on setting agency spending levels. But the administration's move -- which comes as more states face budget crises and find themselves at risk of losing federal matching funds for transportation -- suggests that a spending freeze may indeed be the best case scenario.

Stay in touch

Sign up for our free newsletter

More from Streetsblog USA

Monday’s Headlines Go to War

The conflict with Iran is set to send oil and gas prices skyrocketing. But there are alternatives.

June 23, 2025

Are Tesla’s First Robotaxis Safe For U.S. Roads?

Safety advocates warn that Tesla is failing informal safety tests — even as their taxis take to Austin, Texas roads.

June 23, 2025

The Sound and the Fury of Friday’s Headlines

The tales of internal combustion engines may be told by an idiot, but an EV's silence signifies nothing.

June 20, 2025

Friday Video: Public Art That Saves Pedestrian Lives

What's better than an intersection designed for walking safety? A beautiful intersection designed for walking safety.

June 20, 2025

Talking Headways Podcast: Small Scale Manufacturing in Cities

It's clean, It's quiet, and it's really cool to walk by and see things being made.

June 20, 2025

As ICE Continues Assault on Vulnerable Workers, Groups Launch Fundraiser to Assist Street Vendors

Empty streets and fears of being disappeared off street corners are hurting vendors' ability to stay afloat.

June 19, 2025
See all posts