Thursday, December 30, 2010

Peter Orszag: From Middle Class to Millionaire

President Barack Obama picked Peter Orszag to head OMB (Office of Management and Budget), made famous by David Stockman under President Ronald Reagan.

In announcing Orszag’s appointment in November 2008 shortly after the election, Obama promised that Orszag would go through the federal budget line by line and scrub it free of waste.  Orszag served a relatively short time as head of OMB, resigning his position on July 31, 2010, to get married (anew).  He subsequently took up a position in December 2010 as Vice Chairman at Citigroup’s Strategic Advisory Group.

Orszag’s salary at OMB in 2009 was $193,400 a year ($199,700 in 2010), with another $60,000 or so in benefits.  That put him at the upper end of the middle class category of up to $200,000 for an individual and $250,000 for a couple (excluding fringes).  His salary at Citigroup is reportedly in the range of $2-3 million.

How much waste did Orszag scrub out of the budget during his 19 months at OMB.  The Fiscal Year 2010 Budget sought to end or eliminate 121 programs for a one-year savings of about $17 billion.  Congress approved $6.8 billion of the proposed $17 billion in cuts, which amounted to less than 1% of the $828 billion stimulus package that added to the deficit and debt.

The Budget of the U.S. Government for Fiscal Year 2011 (October 1, 2010, to September 30, 2011), included a 131-page report entitled “Terminations, Reductions, and Savings” that itemized each termination, reduction, administrative savings, and program integrity savings. If approved by Congress, $23 billion in waste would be cut from expenditure.

The federal budget has been on continuing resolution from the beginning of FY 2011 and will remain so until March 4, 2011.  It is highly unlikely that all the president’s proposed savings will materialize in FY 2011.

At the end of 2010, less than $7 billion in waste has been scrubbed from the budget.  The most thorough attempt to scrub waste has achieved a trivial fraction, 0.0018% of $3,834 billion of proposed outlays.  So much for ending waste, fraud, and abuse in the federal budget!

1 comment :

MrN said...

At the end of 2010, less than $7 billion in waste has been scrubbed from the budget. The most thorough attempt to scrub waste has achieved a trivial fraction, 0.0018% of $3,834 billion of proposed outlays. So much for ending waste, fraud, and abuse in the federal budget!
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