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Is Obama’s Underwhelming Spending Freeze A Fakeroo?
Posted By Alison Acosta Fraser On January 26, 2010 @ 11:41 am In Entitlements, Taxes & Spending,Ongoing Priorities | 13 Comments
The President has the right idea with his proposal to freeze spending. Unfortunately, after driving spending to a record $3.7 trillion—nearly 26% of GDP—last year with the accompanying $1.4 trillion deficit, the proposal is at best a bit….underwhelming.
According to the administration, only $447 billion in spending would be subject to the freeze with a total of $15 billion to be saved . So this freeze would reduce the deficit by 1.1 percent or less than half a percent off of last year’s spending. Details have yet to be announced, but those that have trickled out do make one wonder what spending forecasts the White House budgeters are reading.
Spending is out of control. Under Obama, federal spending increased in every category —in many cases massive increases driving spending to its highest point since WWII. Spending needs to be frozen and reduced. Really reduced. If the President is serious about restoring confidence in his ability to control the excesses of Washington, he must go much further.
First – this freeze would only apply to a sliver of total federal spending. The administration has conjured up a new definition of spending called “non-security”, which would only affect about one-eighth of the budget.
Second – as reported – the cap would not be imposed across the board. Some areas would see increases like “investments related to jobs creation” while others like The Department of Justice—a core constitutional function of government—could see a cut . Budgets are about setting priorities and the President should be making such trade-offs across the entire federal budget. He and every president before him have done just that. But calling it a freeze? Puleeze.
Third – the major drivers of spending are completely off the table. Spending on Social Security, Medicare, and Medicaid is about to explode  as baby boomers swarm into retirement. It is impossible to be serious about bringing the budget under control or restoring confidence in his ability to control the excesses of Washington  without taking action to limit spending on these programs.
Fourth - what additional spending would be outside the “freeze” and considered “security”? Emergency spending? Members of Congress are highly skilled at turning an emergency spending bill into a Christmas tree full of unrelated and outrageous spending. A new stimulus bill all dressed up as a jobs bill? Capping repayments (e.g. free) of college loans? New subsidies for child care?
Fifth – what level of spending would this ”freeze” apply to? If it applies to last year’s supercharged spending on stimulus steroids baseline, it’s no freeze at all, but a locking in of spending that was supposed to be temporary. Alternatively, it would be very easy to undo any of the savings. For instance, one small jobs stimulus bill could wipe out all savings.
The simple fact is this: no matter how they spin it, the President must hold spending level with last year—minus all the temporary stimulus, TARP and other bailout spending—otherwise this freeze is a fakeroo.
Article printed from The Foundry: Conservative Policy News Blog from The Heritage Foundation: http://blog.heritage.org
URL to article: http://blog.heritage.org/2010/01/26/is-obamas-underwhelming-spending-freeze-a-fakeroo/
URLs in this post:
 Image: http://www.foundry.org/wp-content/uploads/2009/03/2obama_clapping090204.jpg
 saved: http://www.washingtonpost.com/wp-dyn/content/article/2010/01/25/AR2010012503549.html
 spending increased in every category: http://www.heritage.org/Research/Budget/upload/SR_63.pdf
 could see a cut: http://online.wsj.com/article/SB10001424052748703808904575024772877067744.html?mod=djemalertNEWS
 Social Security, Medicare, and Medicaid is about to explode: http://www.heritage.org/research/features/BudgetChartBook/If-Tax-Revenue-Is-Held-at-Historical-Levels.aspx
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