Obama turns to real estate for savings

The Obama administration is turning to government real estate holdings as it seeks new ways to plug the US budget deficit.

The White House will announce on Wednesday a new plan to manage the Federal government’s real estate holdings, according to an administration official.

Mr Obama will outline a proposal to create a new independent board comprised of private and public officials. They will make recommendations about whether certain Federal civilian real estate holdings ought to be sold, consolidated or reconfigured.

An administration official said the plan could generate $15bn over the first three years. The White House estimates that there are 14,000 buildings that could be designated as excess and thousands more that are underutilised.

“For too long red tape and politics have prevented the government from moving forward of these fronts,” the official said.

According to the proposal, the board would put its views to Congress for an up-or-down vote.

“This approach will enable us to cut through the red tape and overcome the special interests and parochial politics that have traditionally slowed or halted progress when efforts have been made to reduce government’s real estate footprint one asset at a time,” the official said.

The proposal comes as the White House is engaged in tough negotiations with Republicans over the US budget for the fiscal year 2011. The Obama administration is under growing pressure to find budget cuts and savings that could help close a deal.

The proposal on real estate assets coincides with the release this week of a report by the Government Accountability Office, an investigative arm of Congress, that highlighted billions of dollars in duplication of government programmes in a wide range of areas. The report was welcomed by Democratic and Republican lawmakers on Capitol Hill, suggesting that such reductions could win bi-partisan support.