Obama pledges massive overhaul of government

In addition to a five-year discretionary spending freeze, President Obama on Tuesday night announced a reorganization effort to consolidate duplicative federal programs and reduce government waste.

Government hasn't undergone a major restructuring in decades, leaving agencies with overlapping responsibilities, the president said during his State of the Union address. Efforts to cut waste haven't gone far enough, and administration officials in the coming months will develop a proposal to merge and reorganize the federal government, he said.

"There are twelve different agencies that deal with exports. There are at least five different entities that deal with housing policy. Then there's my favorite example: the Interior Department is in charge of salmon while they're in fresh water, but the Commerce Department handles them in when they're in saltwater. And I hear it gets even more complicated once they're smoked," said Obama.

The president also highlighted the role of technology in streamlining government. "We have made great strides over the last two years in using technology and getting rid of waste," he said. "Veterans can now download their electronic medical records with a click of the mouse. We're selling acres of federal office space that hasn't been used in years, and we will cut through red tape to get rid of more. But we need to think bigger."

As expected, Obama also announced a five-year freeze on non-security discretionary spending. He called the freeze "painful" but said the proposals would reduce the deficit by $400 billion during the next decade. Cuts include the two-year freeze on federal civilian salaries approved in December, tens of billions in Defense Department spending and other federal programs. "Already, we have frozen the salaries of hardworking federal employees for the next two years," Obama said.

"Now that the worst of the recession is over, we have to confront the fact that our government spends more than it takes in," the president said. "That is not sustainable. Every day, families sacrifice to live within their means. They deserve a government that does the same."

Obama expressed support for even deeper cuts, noting lawmakers and the bipartisan deficit commission have developed a number of proposals to reduce spending. Other efficiencies could be found in health care programs, such as Medicare and Medicaid, beyond annual domestic spending, he said.

In addition, the president called for efforts to strengthen Social Security and emphasized his recent request for a review of government regulations. The White House last week issued an executive order mandating a regulatory review to improve or potentially repeal outdated, burdensome and inefficient rules that could be stifling private sector job growth.

Rep. Paul Ryan, R-Wisc., who delivered the Republican response to Obama's address, said the president did not go far enough, and pledged that the GOP would work to limit the government's reach and spending. "Limited government also means effective government," he said. "When government takes on too many tasks, it usually doesn't do any of them very well. It's no coincidence that trust in government is at an all-time low now that the size of government is at an all-time high."