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Old 01-25-2010, 07:54 PM  
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Obama Seeks Freeze on Many Domestic Programs

http://www.nytimes.com/2010/01/26/us.../26budget.html

Obama Seeks Freeze on Many Domestic Programs

By JACKIE CALMES
WASHINGTON — President Obama will call for a three-year freeze in spending on many domestic programs, and for increases no greater than inflation after that, an initiative intended to signal his seriousness about cutting the budget deficit, administration officials said Monday.

The officials said the proposal would be a major component both of Mr. Obama’s State of the Union address on Wednesday and of the budget he will send to Congress on Monday for the fiscal year that begins in October.
The freeze would cover the agencies and programs for which Congress allocates specific budgets each year, from air traffic control and farm subsidies to education, nutrition and national parks.

But it would exempt the budgets for the Pentagon, foreign aid, the Veterans Administration and homeland security, as well as the entitlement programs that make up the biggest and fastest-growing part of the federal budget: Medicare, Medicaid and Social Security.

The payoff in budget savings would be small relative to the deficit: The estimated $250 billion in savings over 10 years would be less than 3 percent of the roughly $9 trillion in additional debt the government is expected to accumulate over that time.

The initiative holds political risks as well as potential benefits. Because Mr. Obama plans to exempt military spending while leaving many popular domestic programs vulnerable, his move is certain to further anger liberals in his party. Senior Democrats in Congress are already upset by the possible collapse of health care legislation and the troop buildup in Afghanistan, among other things.

But it would signal to voters, Wall Street and other nations that Mr. Obama is willing to make some tough decisions at a time when the deficit and the national debt, in the view of some economists, have reached levels that undermine the nation’s long-term prosperity. Perceptions that government spending is out of control have contributed to Mr. Obama’s loss of support among independent voters, and concern about the government’s fiscal health could put upward pressure on the interest rates the United States has to pay to borrow money from investors and nations, especially China, that have been financing Washington’s budget deficit.
Mr. Obama’s proposal would have to be agreed to by the House and Senate, and it is not clear how much support he will get in an election year when the political appeal of greater fiscal responsibility will be vying with the pressure to provide voters with more and better services. The administration officials said the portion of the budget they have singled out — $447 billion in domestic programs — amounts to a relatively small share, about one-sixth, of the overall federal budget.

But given the raft of agencies and programs within that slice, the reductions will mean painful reductions that will be fought by numerous lobbies and constituent groups. And not all programs will be frozen, the administration officials said; many will be cut well below a freeze or eliminated to protect programs that are higher priorities for the administration in areas like education, energy, the environment and health.
The balancing act of picking winners and losers was evident on Monday at the White House. Mr. Obama and Vice President Joseph R. Biden Jr. outlined a number of new proposals that will be in the budget to help the middle class. They cover issues including child care, student loans and retirement savings.

Administration officials also are working with Congress on roughly $150 billion in additional stimulus spending and tax cuts to spur job creation. But much of that spending would be authorized in the current fiscal year, the administration officials said, so it would not be affected by the proposed freeze that would take effect in the fiscal year beginning Oct. 1.
It is the growth in the so-called entitlement programs — Medicare, Medicaid and Social Security — that is the major factor behind projections of unsustainably high deficits, due to rapidly rising health costs and an aging population.

But one administration official said that limiting the much smaller discretionary domestic budget would have larger symbolic value. That spending includes lawmakers’ earmarks for parochial projects, and only when the public believes such perceived waste is being wrung out will they be willing to consider reductions in popular entitlement programs, the official said.

“By helping to create a new atmosphere of fiscal discipline, it can actually also feed into debates over other components of the budget,” the official said, briefing reporters on the condition of anonymity.
The administration officials did not identify which programs Mr. Obama would cut or eliminate, but said that information would be in the budget next week. For the coming fiscal year, the reductions would be $10 billion to $15 billion, they said. Last year Mr. Obama proposed to cut a similar amount — $11.5 billion — and Congress approved about three-fifths of that, the officials said.

The federal government’s discretionary domestic spending has grown about 5 percent on average since 1993, according to the administration. It spiked to about 27 percent between 2008 and 2009, however, because of the recession. The sudden increase reflected both the first outlays from the $787 billion stimulus package as well as automatic spending for unemployment compensation and food stamps that is triggered during an economic downturn.
The freeze that Mr. Obama will propose for the fiscal years 2011 through 2013 actually means a cut in real terms, since the affected spending would not keep pace with inflation.

According to the administration, by 2015 that share of the federal budget will be at its lowest level in a half-century relative to the size of the economy.

“A lot of our caucus won’t like it but I don’t think we have any choice,” said an adviser to Congressional Democratic leaders, who would only speak on condition of anonymity about internal party deliberations. “After Massachusetts and all the polls about independents abandoning us for being fiscally irresponsible, we can’t afford to be spending more than Obama.”
While the Democrats’ unexpected loss of a Massachusetts Senate seat in a special election last week gave new impetus to administration efforts to tackle the deficit, those efforts actually have been under way since last fall, when officials began early work on the 2011 budget.

Mr. Obama’s budget director, Peter R. Orszag, initially directed Cabinet secretaries and agency heads to propose alternative budgets — one with a freeze and another that cut spending by 5 percent. Months of internal arguments and appeals followed.

The president, in his State of the Union address, also will propose to create by executive order a bipartisan commission to reduce the debt — assuming the Senate on Tuesday defeats a bill to establish such a panel by law. The presidential commission, like the one proposed in the Senate, would be required to produce a package of entitlement savings and tax increases by December for Congress to vote on.

David M. Herszenhorn contributed reporting from Washington.
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Old 01-25-2010, 08:09 PM   #2
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I'll believe it when I see it. How about cutting out the 5-star trips Congress takes all over the ****ing world?
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Old 01-25-2010, 08:10 PM   #3
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But it would exempt the budgets for ... the entitlement programs that make up the biggest and fastest-growing part of the federal budget
The problem. Not addressed.
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Old 01-25-2010, 08:10 PM   #4
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Administration officials also are working with Congress on roughly $150 billion in additional stimulus spending and tax cuts to spur job creation. But much of that spending would be authorized in the current fiscal year, the administration officials said, so it would not be affected by the proposed freeze that would take effect in the fiscal year beginning Oct. 1
So if we spend it this year then it won't count.
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Old 01-25-2010, 08:13 PM   #5
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For the coming fiscal year, the reductions would be $10 billion to $15 billion, they said. Last year Mr. Obama proposed to cut a similar amount — $11.5 billion — and Congress approved about three-fifths of that, the officials said.
WOW! All of 1.25% of only the Stimulus Bill alone. So in other words, the cuts won't amount to jack.
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Old 01-25-2010, 08:23 PM   #6
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Originally Posted by petegz28 View Post
WOW! All of 1.25% of only the Stimulus Bill alone. So in other words, the cuts won't amount to jack.
It's a showpiece for people who aren't really paying attention.

Probably the sole reason is that the State of the Union is in two days. Does anyone think he would have put us on the hook for $5 trillion+ if he cared about the budget?
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Old 01-25-2010, 08:24 PM   #7
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So Obama is now against his own health care plan? My, what a difference one little special election makes...
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Old 01-25-2010, 09:53 PM   #8
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Originally Posted by patteeu View Post
The problem. Not addressed.
I agree. Without entitlement reform deficit reduction will be too hard and painful to do. But, entitlement reform will be very painful politically. It will only be able to be done with true bi=partisanship. Both parties share the bame and praise equally. Thats the only political cover available.
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I'm not saying it's morally right or wrong, but does it make the child because of it? Think about that for a second.
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Old 01-25-2010, 09:58 PM   #9
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Old 01-26-2010, 12:01 AM   #10
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It didn't take long for the critics to come out in force -- and on YouTube -- against the Obama administration's just-leaked plan to propose a three-year freeze in discretionary, "non-security" spending as part of the upcoming budget.

Some Democrats scoffed at the idea, calling it the wrong approach during a time of deep economic recession. Republicans depicted it as a political gambit destined to be shot down by a non-compliant Congress.

One particularly tough attack, however, was delivered in Obama's own words -- in the form of a video compilation showing the president scoffing at just such a proposal in three successive presidential campaign debates. The video was posted quickly on YouTube.

"The problem with a spending freeze is you're using a hatchet where you need a scalpel. There are some programs that are very important that are underfunded," Obama says in his first debate against Republican candidate John McCain, who was pushing a spending freeze.

"That is an example of an unfair burden sharing," Obama says of McCain's proposal in the second debate. "That's using a hatchet to cut the federal budget. I want to use a scalpel so that people who need help are getting help and those of us like myself and Senator McCain who don't need help aren't getting it. That is how we make sure that everybody is willing to make a few sacrifices."

"It sounds good," Obama says of the proposal during the third debate. "It is proposed periodically. It doesn't happen. And in fact an across-the-board spending freeze is a hatchet and we do need a scalpel because there are some programs that don't work at all. There are some programs that are underfunded and I want to make sure that we are focused on those programs that work."

The administration's argument that it is not backtracking on a campaign pledge seems likely to rest on the use of the term "across-the-board." Obama's proposed cap for discretionary, non-defense spending would allow for some agencies and programs to get additional funding, on the condition that it comes from another agency.

"This is not a blunt, across-the-board freeze," said a senior administration official. "Some agencies will go up, others will go down; but in aggregate for those non-security agencies the total will remain constant."

As for the political dynamics, they clearly have changed since the campaign. Still stinging from the Democratic Party's loss of Ted Kennedy's Massachusetts Senate seat, the White House is apparently choosing to respond to a rise in anti-government sentiment by making a new show of commitment to fiscal discipline.

The president, a senior adviser said, made the decision to propose the spending freeze after consultation with many advisers, in which he came to the conclusion that the government "can't spend more money than it has; that it has to make some decisions about what is vital."

"Do I think this is going to win us lots of kudos among some on Capitol Hill?" the official added. "No."

http://www.huffingtonpost.com/2010/0..._n_436340.html
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Old 01-26-2010, 12:46 AM   #11
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The benefit of understanding objectivism is that when a politician makes a move like this, the first thing I look at is how it benefits him personally. The rest is really just peripheral. I mean, it affects us - but it's not like that's why this move is being made at this point in time. This is about Obama's needs, not ours. Not that he's any different than any president. They've got to be strategic. It comes with the territory.

My first reaction to this news - examining it from a political strategy angle - is that it is actually a clever move. I believe they've had this little trick up their sleeves for some time, but didn't expect to have to use it until AFTER November. They expected to ride wins in health care and environment into November, and they're coming up craps in both. Obama needs a major win and he needs it yesterday. Enter this piece of legislation as the State of the Union draws neigh.

Here is why I think it's a smart strategy for him: when it passes, it will pass with bi-partisan colors. The lefties will HOWL about this and the damage it will do. It really is a akin to throwing holy water on vampires. But these far lefties are nothing but a political token to Obama that he's cashing in. He knows that by turning his back on them, he'll be able to play better towards the center. They'll moan about the economy and the plight of the down-trodden, but mostly they'll be played out to look like spending fools who think the money well is bottom-less.

Republicans are going to have a difficult time communicating criticism over this. Any that try to will end up looking very petty. I agree wholeheartedly with what patteeu said ("The problem. Not addressed."), but I think that message will be a losing one because when they demand more cuts it will play out like they're trying to take social security checks away from grandma and grandpa.

All in all, this is a very solid chess move. It makes him look like he's reaching a hand to the "tea party" folks and working to build coalitions. Many of the Kotter types this nation will be fooled by it, and I expect Obama's approval/popularity ratings to jump between now and November somewhere in the neighborhood of 8 to 12 points, putting him over the 50% mark. That should provide some benefit for them, as they head back to the drawing board on health care and the environment for the second semester of this term.
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Old 01-26-2010, 01:25 AM   #12
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Originally Posted by patteeu View Post
The problem. Not addressed.
Exactly.

Instead of almost doubling the debt during his tenure Obama's great plan will save about 3% of the projected $9,000,000,000,000.00 his administration is projecting to add to the debt.

This is a joke. Obama isn't fixing the problem. He's grasping at a political "storyline" for November and nothing more. All you need to do is ask this question of President Fail: "After you enact your deficit-reduction spending freeze what will your projected debt be after ten years?"

Don't hold your breath for a real answer.
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Old 01-26-2010, 04:19 AM   #13
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Only one year in and the jackass is already grasping for straws.

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Old 01-26-2010, 05:57 AM   #14
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The freeze is a positive step in the right direction, but far too small to be of any real significance.

All I really care about is that the election in Massachusetts seems to have sent a clear signal about deficit spending and the need to rein it in. While the President seems to have gotten the message, he's deferring the pain, and Congress doesn't seem to have figured it out.

If the Republicans run HEAVY on a deficit/debt platform, they might even get my vote. Unfortunately, we don't have any particular reason to actually TAKE the painful setps that are necessary. And that's just it -- they will be painful, and politicans in America are especially bad at making painful choices.
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Old 01-26-2010, 06:49 AM   #15
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Heh. It took Barry a year to focus on the debt and spending...after an orgy of spending and Health Care bullshit. Priorities Barry, priorities.

The Republicans should applaud this move and say that they are glad that the President is finally listening to what they have been trying to say all year. Then they need to challenge the President to work harder with them to cut the deficit further by making REAL cuts to spending and spurring the economy with tax cuts. They can counter this move and it will be a win\win for them and the Pres ala Bill Clinton in the 90's after the Repubs took over Congress.

This will be interesting.
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