Uncle Sam gets stressed

Treasury releases its evaluations of top banks' financial health -- but the federal budget reveals that the government's own fiscal position is shaky.

By Mike Madden

May 8, 2009 | WASHINGTON -- Would the United States government passa stress test?

It was hard to resist asking the question Thursday. Through some unfortunate timing, the Obama administration's top economic and financial officials spent the day releasing both a detailed federal budget and the results of the Treasury Department's examination of the country's biggest banks. Not surprisingly, the spin on each, coming out of the White House, was that things were looking better.

"We must build a government of the 21st century -- a government that is more efficient and more effective," President Obama said in the morning, touting the programs his budget would eliminate for wasting federal money. "Today we have taken an important step toward building this kind of government -- not just for this generation of Americans, but for the sake of generations to come."

...What Republicans in Congress didn't mention, though Conant did, is the essentially make-believe nature of the proposed cuts, anyway. Just about every program in the federal budget has some kind of constituency out there, and some lawmaker is virtually guaranteed to fight to keep every cent of the $17 billion Obama wants to cut. Like the less-detailed budget blueprint Obama put out in February, none of what the administration released Thursday will become law on its own. Congress sets the actual funding levels for all the discretionary spending the budget covers; Obama can veto, or threaten to veto, their appropriations bills, but all the paper the White House shoveled out about the budget amounts to nothing more than a declaration of his negotiating position on the matter....

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