Obama Orders Cabinet to Find Budget Cuts

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WASHINGTON -- President Barack Obama is ordering his cabinet to find some cuts in his new budget. But those cuts only amount to a $100 million out of a $3.5 trillion budget.

The White House is also considering a new move to help the banking system. But some critics warn that move could open the door for nationalizing those banks.

Click the player to watch the report from CBN News Washington Correspondent John Jessup.

Meeting for first time Monday, the President ordered his entire cabinet to cut a combined $100 million from departmental spending.

Time For Serious Fiscal Accountability

It is a way for the White House to show it is serious about reigning in spending and reforming government.

In his weekly radio and Internet address, Obama said it's time to get serious about fiscal accountability and making sure American taxpayers hard-earned money works for them.

"That starts with the painstaking work of examining every program, every entitlement, every dollar of government spending and asking ourselves, 'Is this program really essential?,'" Obama said.

The President identified where some cabinet secretaries have already begun trimming. The Department of Veterans Affairs is saving about $18 million by canceling or delaying conferences. Agriculture is combining 1,500 employees from seven offices into one single space at a savings of $62 million over a 15-year lease period. Homeland Security also estimates it can save $52 million over five years by purchasing office supplies in bulk.

90-Day Deadline

Agencies have 90 days to find cuts and report back. But critics will say the cuts don't even amount to a drop in the bucket in Obama's massive $3.5 trillion budge, which is the largest in U.S. history.

Some of that money is set aside for banks. The White House now says it can stretch the $700 billion bank bailout further further, if needed, by converting the government's existing loans to the nation's largest banks into common stock.

"We believe we have those resources available and the government is the final backstop to make sure that the 19 are financially viable and effective," Rahm Emanuel, White House Chief of Staff told ABC News "This Week."

While that route that would sidestep congressional approval, it would give the government a large share of ownership stakes. Some analysts see that as a back door path to nationalization.

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John Jessup

John Jessup

CBN News Washington Correspondent

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