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.
[snip]
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.)
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He's not cutting spending. He is just not increasing spending for a small part of the budget. Defense and entitlements are off the table, so the actual savings are not very impressive. Color me highly skeptical that Congress actually goes along in any case. It does give Pres. Herbert Hoover, errr, Obama a bullet point for the STFU address ("We asked politely for Congress to try and avoid spending too much on items that don't make up that large a portion of the Federal Budget. But don't worry, we aren't going to touch the stuff that is really killing us."
ReplyDeleteAnd, off topic, isn't it nice how Cindy McCain is praised for supporting Gay Rights. That's the way to encourage the non-Left to come out in support.
gadfly, Bush was Hoover (also Republican), Obama is Roosevelt (Democrat) so get your analogies straight.
ReplyDeleteAnd Obama did try to address the stuff that is killing us (Medicare/Big Pharm spending) but was shot down by the Republicans for wanting to "cut" Medicare for old folks, so please, how about a little bit of facts for a change from you.
And the Republican solution, why tax cuts in times of record deficits, to be paid for by wishful thinking on future job growth (lets see, the last massive tax cut under Bush brought a lost decade in wage growth and the onset of another great depression)
Dude, your ignorant little insults are so easily rebutted by reality, it makes me think you are either giving Doug Feith a run for his money, or you are secretly a radical liberal just baiting people.
charo
Charo, Gadfly a secret radical liberal baiting us? Next thing you know you will have us believing you live on a beach in Mexico?
ReplyDeleteFrom a personal point of view, I'm worried. The academic jab market has just been devastated. Talented people are unemployed, others have incredible work burdens for pay barely above poverty level (I am not exaggerating). Not only am I worried about my job propsects, it must be diminishing the quality of higher education.
ReplyDeleteTHe academic job market, that is. The academic jab market has survived the recession very well, it turns out.
ReplyDeletecharo, the problem is that Pres. Obama destroyed his credibility when he failed to deliver on his promises; no transparency in HCR debate, selling seats at the table to Big Pharma and Big Insurance don't exactly inspire people to follow along when the painful truths are addressed, to put it mildly.
ReplyDeleteBig Bang HCR is dead, killed by Obama, Reid, and Pelosi's fecklessness and arrogance. The path to incremental reform still lies open for the brave pols who will do the hard work of earning the trust of the American people by delivering what they promise and speaking plainly and honestly.
Clinton tried to run roughshod over Congress and got killed, Obama deferred to Congress and was literally one iconic Senator's death away from passing the greatest health care reform bill in history, so Obama came much closer than any President in history from fulfilling his major promise. If Kennedy had lived only one month more...the bills would have reconciled and Brown's victory would have been meaningless.
ReplyDeleteYes, big bang HCR is dead, as is little bang, as is any bang, incremental or otherwise, the Republicans will never agree to any policy of Obama since they are now in forever obstruction mode, and if Republicans ever get back in the White House, the Democrats will exact their revenge, welcome to eternal gridlock, which is why Democrats need to reboot and go to the states. If Mass. works, do it in Pa. etc.
And please, brave pol? The words don't go together, the days of Harry Truman are long gone.
charo
Greatest Healthcare Reform bill in history? Everyone, left to right, agreed on only one thing; the bill was a disaster. The only way to make it even appear financially possible was to lie about the lies. The Insurance industry was begging Congress not to throw it in that briar patch. Every special interest in the east arm of the Milky Way put their pet fetish in the bill. The Pharma bought high profits outright with WH approval. Senators were openly bribed with our money.
ReplyDeleteThe Rs have proposals, and the Pres. would do well to listen for a change. It is easier to get 60 out of 100 than 60 out of 60, or today, 60 out of 59.
Speaking of Scary-smart, I'm hoping he'll get a clue. He's so beaten down that even ObamaGirl has taken his picture off the wall. If he has any humility at all, now is the time learn, to turn it around. If the SOTU address turns into the STFU address, if it contains more than one disparaging reference to Mr. Bush, if he doubles down on stupid by going to war against Wall Street, well... But I have some hope that his scary-smartness will help him see that what he's been doing just isn't working. I'll be watching for signs of a dawning realization that his old tell-them-what-they-want-to-hear routine is so over. Let's hope for honesty, humility, and a willingness to change course.
BTW, the drinking game:
"Let me be clear" - take a drink
"This isn't about me" - take two drinks
"coporate greed" - sip champaign from the naval of a stripper
"false choice" - take three drinks
"problems we inherited" - a shot of Whisky
"copenhagen" - sip a frozen drink
With any luck, you'll be unconscious before the Republican response.