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 freeze would cover the agencies and programs for which Congress allocates specific budgets each year, including air traffic control, farm subsidies, education, nutrition and national parks.
But it would exempt security-related 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 deficits the government is expected to accumulate over that time.
My interpretation? Obama is going to take a page from the Republican political playbook. The effect on the actual deficit will be negligible. Set for the federal Frigidaire are programs designed to help people, which are of particular importance during a time of 10% unemployment. For the purposes of "sending a signal."
As I conceded readily in the title for this post, I'm not an economist. But it's my understanding that cutting government spending during a recession is exactly the wrong thing to do. (If anything, the stimulus that was passed in 2008 may have been too small.) Am I wrong in thinking this is precisely the kind of tactic that Hoover tried during the Great Depression? (That's not actually a rhetorical question -- anyone with a firmer grasp of economics and history than me [this means you, third-graders] should feel free to correct me if I'm wrong.)
You can count me among those liberal quondam supporters of the POTUS whose support for this plan is "tepid."
Update: Yglesias offers a somewhat measured response. Benen and Coates are skeptical. Judis isn't impressed.
Update II -- Son of Update: Also not a fan? Paul Krugman. (Surprise, surprise.)