My concern is that too often we go into this cutting frenzy like Freddie Kruger. The idea to cut government and make it more efficient is what Obama is finally getting around to with economics. he is looking for duplication in effort across the executive branch and centralizing it all inton one group. Carter did this and Clinton tried. To just hack our way through the executive is stupid and ends up being actually wasteful. This scalpel affect would also be towards agencies and offices that no longer serve a useful purpose or are part of some Congressmans long ago wet dream. (if you have seen the movie Dave, you will know what i mean.)
The only exception to this is the Defense Dept. Study after study has shown (GAO) has shown that the DOD can be cut by 30+% and not loose any effectiveness. I would hope that monies dedicated to the troops and logistics would be carefully reviewed first, but there is a hell of alot of waste in DOD.