Obama: 3 Year freeze on discretionary spending

[sciwizam]

WSJ

WASHINGTON—President Barack Obama intends to propose a three-year freeze in spending that accounts for one-sixth of the federal budget—a move meant to quell rising voter concern over the deficit but whose practical impact will be muted.

To attack the $1.4 trillion deficit, the White House will propose a three-year freeze on discretionary spending unrelated to the military, veterans, homeland security and international affairs, according to senior administration officials. Also untouched are big entitlement programs such as Social Security and Medicare.


The freeze would affect $447 billion in spending, or 17% of the total federal budget, and would likely be overtaken by growth in the untouched areas of discretionary spending. It's designed to save $250 billion over the coming decade, compared to what would have been spent had this area been allowed to rise along with inflation.

The administration officials said the cap won't be imposed across the board. Some areas would see cuts while others, including education and investments related to job creation, would realize increases.

Among the areas that may be potentially subject to cuts: The departments of Housing and Urban Development, Justice, Energy, Transportation, Agriculture, and Health and Human Services.

"We're not here to tell you we've solved the deficit, but you have to take steps to put spending under control," a senior administration official said.

The spending freeze, which is expected to be included in Wednesday's State of the Union address and the president's Feb. 1 budget proposal, is one of a series of small-scale initiatives the White House is unrolling as the president adjusts to a more hostile political terrain in his second year. On Monday, the president unveiled a set of proposals aimed at making child care, college and elder care more affordable....

From the debates

Also during the campaign, he objected to Republican rival John McCain's call for an across-the-board spending freeze (except for defense, veterans care, and entitlements).

"That's an example of an unfair burden sharing. That's using a hatchet to cut the federal budget," Obama said during their second debate. "I want to use a scalpel so that people who need help are getting help and those of us, like myself and Sen. McCain, who don't need help, aren't getting it."

Guess, the hatchet seems like a better option now. :sneaky:

 

[Hayabusa Rider]

Entitlements need to be reformed, or this is window dressing.

 

[Hacp]

A freeze is not enough. We need a reduction on all spending.

 

[Hayabusa Rider]

A freeze is not enough. We need a reduction on all spending.

You aren't going to get it, therefore your real world choices are to freeze things now and let economic growth (yeah there is still some of that) decrease the proportion of money spent on government or accept the status quo.

 

[Craig234]

How predictable. Once again Democrats are the ones leading the way on 'fiscal responsibility' and they get pooh-poohed by the supported of the party of say one thing do another fiscal irresponsibility.

There are good things about this - it recognizes the crisis we're in, and has the flexibility to move the spending to where it'll help most and makes some tough cuts because of the crisis.

It's not inconsistent with Keynesian economics allowing the spending to go up in places while being conerned with the extreme deficit.

Too bad the progressives are blocked on healthcare, between the 40 Republicans and some corporatist Dems, from the Medicare for all that would cut costs and cover everyone.

 

[bamacre]

"It's designed to save $250 billion over the coming decade"

LOL, yeah $25B per year for 10 years. That's really cutting the costs. :\

They're spending three times that amount, this year alone, on unnecessary wars.

 

[bamacre]

Once again Democrats are the ones leading the way on 'fiscal responsibility'

 

[Darwin333]

You aren't going to get it, therefore your real world choices are to freeze things now and let economic growth (yeah there is still some of that) decrease the proportion of money spent on government or accept the status quo.

Either way we are screwed, so why not just go for broke?

If you absolutely know you are going bankrupt then it is dumb to cash out your 401K to try and stay afloat a bit longer. I say screw it, if they are dumb enough to lend it to us we are dumb enough to spend it.

 

[Craig234]

Yes, it's hilarious. You have a point, since Republicans slashed the deficit to alll-time lows for 12 years with Reagan on, and then Bill Clinton shot it up every year for 8, and then George W cut it back low again.

 

[Genx87]

Discretionary spending unrelated to military, homeland security? lmao ok. More talk, no substance. So while he freezes a small portion of the budget, the other 80% goes crazy.

 

[Genx87]

Yes, it's hilarious. You have a point, since Republicans slashed the deficit to alll-time lows for 12 years with Reagan on, and then Bill Clinton shot it up every year for 8, and then George W cut it back low again.

And now Obama is shooting it up further. Good job!!!!!!!!!!!!

 

[PrinceofWands]

Exactly the opposite of what needs to be frozen/reduced. Capping military spending at 10% would free up far more with next to no negative impacts to anything that mattered. This is just going to hurt us where we can least afford it.

 

[Ozoned]

How about lay off an appropriate amount of federal employees so that their unemployment rate matches that of the private sector?

How about cancel the tarp program and cancel that debt to the tune of the amount left?

How about cancel the remainder of the unspent economic stimulus money since it isn't stimulating anything.

How about, on the same day that you announce a freeze on certain types discretionary spending, THAT YOU NOT ANNOUNCE TAX CUTS IN THE FORM OF CHILD CARE TAX CREDITS AND OTHER NEW SPENDING MEASURES.

This guy is desperate. He is throwing shit in the air to see if he can find something that will catch the political winds,,, in his favor.

 

[Craig234]

And now Obama is shooting it up further. Good job!!!!!!!!!!!!

Yes, the bastard took measures aimed at the economy not entering another great depression. And now he's talking about freezing a lot of spending. That'll raise the deficit!

 

[Genx87]

Yes, the bastard took measures aimed at the economy not entering another great depression. And now he's talking about freezing a lot of spending. That'll raise the deficit!

The measure that stopped a 2nd great depression was passed and signed into law before Obama was even elected.

 

[Craig234]

Exactly the opposite of what needs to be frozen/reduced. Capping military spending at 10% would free up far more with next to no negative impacts to anything that mattered. This is just going to hurt us where we can least afford it.

I'm all for reductions to military spending. At least we can Republicans not to politicize that with attacks of 'weak on defense the bad guys will conquer us'.

 

[Fenixgoon]

"We're going to freeze discretionary spending on everything except the things that really cost money."

 

[nonameo]

Look, the govt can't just cut the military like that. It just won't happen and it would be suicide for any politician. I think a more reasonable solution would be to give the military other things to do besides fighting wars.

You know, things like... um...

...

...

well you know what I mean. There's all kinds of talent in the military. It doesn't necessarily have to be used to fight.

 

[Ozoned]

Look, the govt can't just cut the military like that. It just won't happen and it would be suicide for any politician. I think a more reasonable solution would be to give the military other things to do besides fighting wars.

You know, things like... um...

...

...

well you know what I mean. There's all kinds of talent in the military. It doesn't necessarily have to be used to fight.

Things like what???

 

[woolfe9999]

Entitlements need to be reformed, or this is window dressing.

This.

And military spending needs to be cut across the board. Otherwise, you are nickle and diming the problem.

- wolf

 

[Hayabusa Rider]

Either way we are screwed, so why not just go for broke?

If you absolutely know you are going bankrupt then it is dumb to cash out your 401K to try and stay afloat a bit longer. I say screw it, if they are dumb enough to lend it to us we are dumb enough to spend it.

Politics is an art of the possible. I've seen you post and you aren't an idiot although I don't always agree with you (who always agrees with anyone anyway?)

My point is that we are not going to get special robes and wizard hats to change how things work. Therefore we have to work with what might be done, that is to say have less than fatal opposition.

Alone, I agree that Obama's solutions aren't going to be enough, and in fact there won't be any savings. What will happen is that his spending will not be considered "discretionary", child care credits for example.

All that he accomplished is holding down non-entitlement programs while he expands Medicaid and Medicare etc.

A wash at best.

Now if we could get a compromise where much more is included in a freeze, then the proportion of government to GDP would decrease. It would take time, but we would have a direction which would stimulate growth and improving the situation further.

Or, you could just set fire to the bank and fry your savings entirely.

Pick one, because you haven't a snowballs chance of actually cutting programs.

 

[bfdd]

It's a start.

 

[ProfJohn]

"Given Washington Democrats' unprecedented spending binge, this is like announcing you're going on a diet after winning a pie-eating contest,"


That quote explains it all.
In 2008 the government spent almost $3 trillion.
This year the government will spend $3.5 trillion.

That is a $500 billion increase in just 2 years.

To put that in perspective it took 4 years for Bush to go from $2.4t to $2.9t.

An even better example of why this is BS is to just look at non-defense discretionary spending under Obama.
In 2008 non-defense discretionary spending was $508 billion.
In 2009 non-defense discretionary spending was $586 billion.
In 2010 non-defense discretionary spending will be $666 billion.

We are talking about back to back 15% increases in spending.

So even after this 3 year freeze we will be way above where we should be had spending been held to inflationary levels.

 

[sciwizam]

I want to know from what baseline they are estimating the benefits of this freeze. Gonna have to call shens, if they are calculating from an already elevated baseline.

 

[nonameo]

Things like what???

If I could have filled in the blank I would have