Obama To Propose Discretionary Spending Freeze
Matthew Yglesias reports that the Obama Administration is proposing a Discretionary Spending Freeze from 2011-2013.
On an exciting phone call with progressive internet writers earlier this evening, a senior administration official outlined the Obama administration’s plan to call for a freeze in non-security discretionary spending spending starting with the Fiscal Year 2011 budget. Described as an effort to balance concern with a “massive GDP gap” in the short run and “very substantial budget deficits out over time,” the plan calls for the FY 2011 budget to be higher than the FY 2010 budget, but then for non-security discretionary spending to be held constant in FY 2012 and FY 2013. (Let me note right here that all of the reporters on the call, myself included, screwed up and forgot to seek clarification as to whether this is a nominal freeze or a real dollar freeze).
The freeze would not apply to the Department of Defense, the Department of Veterans Affairs, the Department of Homeland Security, or to the foreign operations budget of the State Department. The official emphasized that the freeze is not the only element of the administration’s plans for deficit reduction, just the only element he was prepared to discuss on this particular call. “This is only one component of an overall budget,” he said, “you’ll see other components on Monday.”
So is this an across-the-board freeze like we’ve heard Republicans call for? No, it’s “not a blunt across the board freeze.” Rather, some agencies will see their budgets go up and others will go down, producing an overall freeze effect. The senior official sought to portray this as not just a question of spending less money, but of getting our money’s worth—cutting (unspecified) ineffective programs and spending more on programs that work.
Presumably, we’ll get more detail about this during the State of the Union and the inevitable spin afterwards. I’m not opposed to a discretionary spending freeze in the slightest, but from a fiscal perspective, leaving out “the Department of Defense, the Department of Veterans Affairs, the Department of Homeland Security, or to the foreign operations budget of the State Department” leaves out pretty much most of the Federal budget from the freeze. Not to mention debt service, which can’t be frozen either. My back of the envelope calculation is that this will end up freezing about 25-30% of the discretionary budget.
Better than nothing, I suppose. Hopefully, the target of the most cuts in the rejiggering of the budget is corporate and farm subsidies. But I wouldn’t hold my breath on that.
It’s also worth mentioning that during all three Presidential debates, Obama was fervently opposed to this type of spending freeze. Any takers on a bet that this becomes more of the focus of the media discussion than the actual budget proposals?