President Obama to Push 3-Year Spending Freeze on Non-Security Discretionary Spending

Jan 25, 2010 7:39pm

In his budget for Fiscal Year 2011, to be presented on Monday, February 1, President Obama will propose a three-year hard freeze on non-security discretionary spending, to last from 2011 through 2013.

This will save $250 billion over the next decade, senior administration officials told reporters. (The debt during that same period is projected to grow by $9 trillion.) By 2015, non-security discretionary spending will be at its lowest level as a component of the nation’s Gross Domestic Product in 50 years.

The announcement will come at a time when the White House and Democrats are trying to deal with voters angry about a dysfunctional Washington, DC, with many concerned about the deficit and out-of-control government spending. The president and his team have said for months that he would address deficits in his State of the Union address, knowing that the massive spending in the Wall Street bailout and stimulus package would make many Americans uneasy, but the upset victory of Sen.-elect Scott Brown, R-Mass., underscored that concern.

Senior administration officials acknowledged that various government officials were already protesting the potential cuts and freezes in their budgets and favored projects, but wouldn’t go into detail.

“Tune in Monday” to see who protests after the budget is released, an official joked.

The base level of non-security discretionary spending for Fiscal Year 2010 is $477 billion. From 2011 through 2013, a senior administration official said, spending “will be no higher than that.”

The administration is defining security-related discretionary spending – which will not be impacted by this freeze – as spending related to the Pentagon, the Department of Veterans’ Affairs, the Department of Homeland Security, and spending related to international affairs.

“We are at war and we’re going to make sure our troops are funded at an adequate level,” a senior administration official said.

This category – roughly one-eighth of the overall budget, or about 1/3rd of total discretionary spending — is generally what people think about when they say they want Washington, DC, to rein in spending, a senior administration official said. They don’t mean Medicare, Social Security, or defense spending, the official said.

In response to the announcement, Michael Steel, a spokesman for House Minority Leader John Boehner, R-Ohio, said, “given Washington Democrats’ unprecedented spending binge, this is like announcing you’re going on a diet after winning a pie-eating contest.  Will the budget still double the debt over five years and triple it over ten?  That’s the bottom line.”

"You know what’s remarkable about the spending freeze proposal?" noted a Senate GOP aide. "It highlights just how big of a hole the stimulus bill created. It takes a three-year spending freeze to save about 250 billion—or one third of the deficit created by the stimulus alone (not counting interest, which averages $100 million every day)."

An administration official responding to the criticism noted that "from 1995 through 2006, when the House was solidly in Republican control (as was the Senate, save the time from June 2001 through January 2003), non-security discretionary funding increased by 90 percent – or $190 billion."

This spending freeze does not apply across the board. Some agencies will see increases in spending during the three-year period, some will see decreases.

This was not a recent decision, officials insisted. “The numbers have been locked in for weeks,” and the budget has been at the printers since before the Massachusetts special election that sent shockwaves through the political world, officials said.

The officials acknowledged that the bigger issues dealt with the growth of entitlement programs such as Social Security, Medicare, and Medicaid, and this wouldn’t solve the nation’s deficit issues.

“From a macro-economic perspective, we don’t think this will have a huge effect,” an official said.

On the other hand, he said, “you can look at an M&M and say, ‘it’s just 5 calories,’ and then you have another one” and before long you’ve consumed the bag.

The specific programs and budgets to be cut will be included in a separate volume and issued the same day as the FY 2010 budget, as they were last year when the Obama administration proposed $11.3 billion in spending cuts, 60% of which – or $6.9 billion — were actually made.

The Obama administration’s favorite Washington Times story of all time  – which was cited, again, today — noted that President Obama managed “to get Congress to ax several programs that had bedeviled President George W. Bush for years….Mr. Obama was victorious in getting Congress to slash 24 programs and achieved some level of success in reducing nine other programs,” including the “F-22 Raptor program, ending the LORAN-C radio-based ship navigation system and culling a series of low-dollar education grants. In each of those cases, Mr. Obama succeeded in eliminating programs that Mr. Bush repeatedly failed to end.”

The senior administration officials noted that many reporters had been skeptical of President Obama’s ability to enact those cuts, suggesting that this new goal of a three-year spending freeze would meet with some success as well.

- jpt

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