President Tells Agencies to Cut Payrolls, Perks

President Clinton ordered Cabinet agencies Wednesday to cut administrative overhead and payrolls and eliminate perks as he stepped up efforts to convince taxpayers he is reducing government waste.

The moves come as the President prepares to ask the American people to support the tax increases and program cuts expected under the economic plan he is to unveil next week.

Clinton announced the executive orders at the White House as he and his aides began making final decisions on the economic package he plans to release in a speech to a joint session of Congress next Wednesday.

The President plans to begin meeting with congressional leaders today to brief them on the outlines of his plan, White House Communications Director George Stephanopoulos said.

As the plan has developed, the Administration has come to rely far more heavily on tax increases to reduce the federal budget deficit than Clinton discussed in his campaign.

During his confirmation hearings, for example, Office of Management and Budget Director Leon E. Panetta said the Administration’s deficit-reduction package would strive to produce two dollars in spending cuts for every dollar of tax increases.

Several conservative Democrats in Congress have repeated that number in describing the sort of budget plan they would like to see.

However, a senior Administration official Wednesday described that statement as merely Panetta’s “personal benchmark” and “not a specific number that he as OMB director or the Administration is wedded to.”

The economic plan will include spending cutbacks, the official said, “but I don’t know that it will reflect that number.”

Abandoning the two-for-one goal became all but inevitable earlier this week when Administration representatives officially buried the idea of reducing Social Security benefits--one of the government’s largest spending programs.

Administration officials also have conceded that they cannot include many anticipated health care savings because they will be needed to pay for Clinton’s plan to expand health coverage to those currently without insurance.

As those limitations have emerged, Clinton has sought to make reductions, like those announced Wednesday, that contain powerful symbols.

Federal officials below the rank of Cabinet secretaries no longer will be able to use government limousines to go to work.

Also, high-ranking officials no longer will be able to eat in subsidized executive dining rooms, and most officials from now on will have to fly on commercial airliners when they take non-government trips, rather than using government planes and then reimbursing the government at far less than the full cost, as has been common in the past.

Clinton plans to reduce federal civilian employment by 100,000 over the next four years by not filling vacancies and perhaps by offering early retirement packages. Roughly 200,000 of the government’s 2.1 million civilian workers leave each year.

In addition, he ordered a 14% cut in federal administrative and overhead costs over four years--3% in each of the next three years and 5% for fiscal year 1997--and directed agencies to eliminate a third of the more than 700 outside advisory committees that work for the government.

The reductions will have limited impact on the overall federal budget. Clinton said they will save taxpayers $9 billion over four years, a sharp retreat from a campaign claim that such cutbacks could save more than $30 billion over the same period.

The $9 billion is equal to only slightly more than one-tenth of 1% of the $6.5 trillion the government intends to spend over the next four years, illustrating precisely why it is so difficult to make meaningful cuts in the federal budget by trying to eliminate waste and inefficiency.

Clinton’s effort to reduce the government’s administrative costs raises another problem: Until now the government never has accounted separately for its administrative overhead, and officials have not yet come up with a generally accepted definition of precisely what the President’s order will cover.

Cutting administrative costs “is an idea that has bounced around for some time,” said Mark Musell of the Congressional Budget Office, which monitors federal spending. “People mean very different things when they talk about it.”

A senior OMB official said the Administration plans to define overhead as a combination of travel costs, communications, printing and reproduction, supplies and consulting services.

The OMB will draft regulations to define those costs and will require each federal agency to begin separate accounting for them, the official said.