Obama admin looks to many small cost-cutting tactics

WASHINGTON Mon Jul 27, 2009 8:26pm EDT

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WASHINGTON (Reuters) - The U.S. Forest Service is to stop repainting new cars and air force jets are to use cheaper fuel as part of a cost-cutting drive by the Obama administration, which is confronting a record deficit.

In April, Obama challenged government departments to find $100 million in savings, a move ridiculed by Republicans who said the government was projected to spend $4 trillion this fiscal year alone.

Obama's budget director, Peter Orszag, said on Monday government agencies had identified 77 cost-saving measures that would see $102 million saved in fiscal year 2009 and $140 million in 2010.

Among the proposed efficiencies, a plan to replace standard jet fuel used by the military with commercial jet fuel plus additives. The Defense Department estimates this will save $52 million in 2010.

The Justice Department said it could save another $4 million if employees made their travel arrangements online, rather than relying on travel agents, and the Agriculture Department said it expected to save $1.8 million by not repainting newly purchased Forest Service cars.

The Navy expects to save more than $10 million by modifying maintenance procedures for submarines.

"These savings reflect the president's belief that even small savings can add up," Orszag said.

The release of the figures comes amid continuing debate in Congress over the $1 trillion price tag on Obama's proposed healthcare overhaul. Republicans and fiscal conservatives in Obama's Democratic Party have balked at the cost.

The administration has also delayed until August the release of its mid-year budget review, which is likely to include a revised projection of the 2009 deficit.

In May, the White House increased its budget deficit estimate for 2009 to $1.84 trillion -- representing a massive 12.9 percent of gross domestic product.

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