Tuesday, January 26, 2010

Obama to Propose a Budget Freeze

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.
Is this proposal a step in the right direction?  Yes, as far as it goes.

But it's a baby step: only $250 billion saved over the coming decade.  To make a real difference, cuts must focus on national defense, social security, and health care.  These three are the largest components of the budget, and health care in particular is growing rapidly.  Unless budget cuts tackle these items, they will have only minor impact.

In addition, most of the affected programs should actually be zeroed out, not just frozen at current levels; that would be a real start on fiscal responsibility.

Still, any restraint in spending is welcome.  We will see if President Obama wields his veto pen if (when) Congress does not play along.

28 comments:

Stephen MacLean said...

'Zeroing out' is key, in reassigning to their proper sphere those individual and state obligations that may have been usurped by the national government.

Simply imposing a freeze on future growth is cosmetic at best, since it does not effectively curtail present emergency spending in these 'frozen' areas if deemed necessary, nor the future re-assumption of growth when some arbitrary body--no doubt the State itself--declares the reasons for the original freeze to have passed.

happyjuggler0 said...

Jeff,

I believe the $250 billion number is over 10 years, not 3 years. The freeze however is 3 years.

So you have about a $1,400 deficit over 1 year, and a mean average per year of $25 billion. Take approximately 1,400, subtract 25, and you still have about 1,400.

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