Obama To Propose Major Spending Freeze Saving $250 Billion
President Barack Obama will propose a three-year freeze in discretionary, "non-security" spending as part of a budget he will unveil one week from now, a senior administration official told the Huffington Post and other reporters Monday evening.
The president will unveil the proposal during his State of the Union address on Wednesday and will describe it as saving $250 billion over 10 years, relative to what spending on those programs would have been otherwise. His goal is to keep the budget for the affected agencies at or below the $447 billion that was spent on them this past year.
"We face the dual challenges of a massive GDP gap and also very substantial budget deficits out over time," said the administration official. "As we move forward to FY2011 that's a transition year in which we need to be shifting our focus, making sure we're getting as much as we can from each dollar that the federal government has. And this is not the end-all-be-all, but it is an important category of restoring discipline to an important component of the budget."
The spending freeze is likely to meet with tepid support among the president's fellow Democrats, many of whom view self-imposed limitations as risky politics and policy at a time of deep economic recession. Last week, House lawmakers -- who will essentially have a larger role than the president in assuring that the spending freeze is implemented -- rejected the proposal after it was initially floated. One Democratic strategist jokingly quipped that the president was taking a page out of the Republican playbook for the sole purpose of placating his Republican critics.
"So we already know Obama has now taken the McCain campaign's health care position on the excise tax," the strategist said. "Wasn't a freeze in discretionary spending also McCain's plan for when the economy tanked?"
The senior administration official did not address these concerns directly. But in a 15-minute conference call with half a dozen reporters from online outlets, he did state that the White House "may well" pursue additional "jobs-related" legislation in 2010. As for the agencies that would now have to deal with spending limits -- the EPA, Commerce Department, Health and Human Services, and the Department of Interior to name a few -- the administration official noted that there would be some budgetary flexibility should emergencies arise. If more money is needed at one agency it can go there, but only at the expense of another.
"This is not a blunt across-the-board freeze," said the 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."
Exempt from the limits will be security and defense agencies, whose budgets will undoubtedly rise in the years ahead as the president pursues an aggressive foreign policy agenda. Asked whether the administration is concerned that the deficit reduction pursued by freezes on "non-security" spending would be wiped out by increases in military spending, the administration official said that the White House had and would continue to pursue budgetary discipline in the area of national defense.
"I think it's worth separating money for the troops from the procurement budget. We will be funding the troops to the degree that is necessary to the degree that they are adequately protected," the official said. "But then, for example, on the procurement part of the budget, within the DoD, [we are] continuing to try and achieve more efficiencies."
The official added that the discretionary "non-security" spending freeze was just the first bite of the apple when it came to the administration's efforts to rein in government spending. "You're going to see other components of deficit reduction strategy when we release the budget," the official said, noting earlier that if all goes to plan, by 2015 the administration will have brought this category of spending to its lowest point (as a share of the economy) in 50 years.
"I think what's important to keep in mind here is that what we are trying to accomplish is this is only one component of an overall budget -- you'll see other components on Monday," the official said. "And we are again, in 2011, 2012 and 2013, focused on getting as much as we can from each dollar that's going into this category of spending."