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Surprise! We got you a spending freeze.

The Center for American Progress is, far and away, the most plugged-in think tank in town. Many of us watch their reports and releases because they're often the first indication of where White House policy and messaging is moving. Not this time. Six days ago, CAP released a report meant to help people spot "deficit peacocks": folks who "like to preen and call attention to themselves, but are not sincerely interested in taking the difficult but necessary steps toward a balanced budget." Among the targets?

Those who claim that we could get the budget back to sustainability if we only cut out earmarks, or say that the solution is to simply freeze discretionary spending, are just peddling fiscal snake oil.[...]

Freezing discretionary spending, the spending that Congress reappropriates every year, at current levels will similarly yield only very small budgetary savings. The federal government spent a bit more than $625 billion on non-defense discretionary programs in 2009. The Congressional Budget Office projects that, in five years, the federal government will spend about $660 billion on the same programs. Freezing non-defense discretionary spending at current levels would therefore only produce a total savings of $35 billion in 2015. That year, the budget deficit is expected to be around $760 billion. Saving $35 billion would solve less than 5 percent of the problem. There may be some savings to be found in non-defense discretionary programs, but a spending freeze would accomplish extremely little in the way of measurable deficit reduction.

I think it's fair to say the left was taken by surprise with this proposal.

By Ezra Klein  |  January 26, 2010; 10:00 AM ET
Categories:  Budget  
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Next: The Obama administration loses the deficit -- and the spending -- argument

Comments

I think people may be missing the point of the "freeze." First, it is not a freeze in the traditional sense since spending will change based upon priorities-some going up, some down, some gone. I think Obama may really be making a different point with this. First, it is a statement that we only have so much money to spend and so we have to actually make choices. Second, for those who think that this is how the budget will be balanced and deficits reduced, his answer is no it wont. He will embrace the minimal savings and say that is why we must go after where the real deficit problem is - in health care. He can actually use this to point out the importance of health care reform. The public seems to believe that the type of spending affected by the freeze is where the problem is. Obama, I think, intends in part, to demonstrate with this effort, that really is not where the problem is. He intends to establish credibility with people by his willingness to take the heat for this and say that he is going after bad spending while at the same time pointing out that is not really the problem or the solution.

Posted by: gregspolitics | January 26, 2010 10:20 AM | Report abuse

As a tactic to force changes in things like agriculture subsidies, the 'freeze' may be useful in negotiations with congress. But as a means of honestly communicating to the American people the problems and priorities and unmasking those 'peacocks, not so much. And great risk of just energizing the peacocks to cut programs essential to economic justice.

Posted by: ljfamily | January 26, 2010 10:25 AM | Report abuse

I have a sincere question that I would love someone knowledgeable to answer. IIRC, the Bush taxcuts expire this year because they were done under reconciliation (ha!) which has a 10-year sunset. Has any legislative action been taken to extend the cuts? If not, doesn't that mean that the government will start collecting LOTS more tax revenue in 2011? Isn't it enough to have a BIG impact on middle- and long-term deficit forecasts? Does the CBO or OMB take the expiration into accoutn when doing forecasts? So aren't we just running out the clock until Jan 1, 2011?

Posted by: rdbacon66 | January 26, 2010 10:29 AM | Report abuse

What's baffled me in the last year is how impatient liberals have been. This vague, undefined "spending freeze" is announced yesterday and I get a text from a friend this morning that we need to find a primary challenge for President Obama for 2012. I'm not saying I'm onboard for a spending freeze. All I'm saying is that I'm going to wait to see the plan before I freak out. I'm not going to freak out that the public option was removed from HCR if it ends up passing (I know, it's not looking good) and there's evidence that it would not have passed with the public option. Just take a deep breath and wait for all the information before you blow up.

Posted by: MosBen | January 26, 2010 9:57 AM | Report abuse

this was written by another commenter on a post relating to the freeze. i took the liberty to reprint it, because it is so sensible.
no sooner does the administration present an idea, then the black crepe is being hung over it.
dealing now with many democrats is like trying to placate an impatient, tired, petulant child. it wouldnt matter what you offer them, they will toss their fist down on the table.
"no, no, no."
in these columns now, there is talk of a one-term president, impeachment, the freeze announced last night, is already being concluded as a failure. the popular tabloid blogs ridicule every proposal of the administration.
we have gone from the sublime to the ridiculous.

Posted by: jkaren | January 26, 2010 10:31 AM | Report abuse

I'm curious as to how this will be set up. One thought that crosses my mind is that people will get a better sense of how the money is spent, and on what programs it goes towards. Of course, that requires people to pay attention.

Posted by: EricS2 | January 26, 2010 10:50 AM | Report abuse

I hope he's not making the FDR/Morgenthau mistake of pulling the rug out from under the recovery to please people who have no idea about how this stuff works.

Posted by: wdague | January 26, 2010 11:27 AM | Report abuse

Re: "Does the CBO or OMB take the expiration into accoutn when doing forecasts?"

The CBO does take this into account in its Baseline. The CBO is required to create a Budget and Economic Forecast limited by Current Law, which means it has EGTRRA and JGTRRA expire in 2010. This can be seen on the Summary Table 1 of the recent release: http://www.cbo.gov/ftpdocs/108xx/doc10871/01-26-Outlook.pdf.

However, the CBO does also provide alternative scenarios and the effect of policy alternatives on the Baseline (Table 1-5) For example, extending EGTRRA and JGTRRA will increase the deficit by 311 billion in 2020, not including the increased debt service from previous years.

Posted by: Illudius | January 26, 2010 11:30 AM | Report abuse

Excusenicks are out in force, it seems. But the idiocy of calling for a spending freeze now, when this can only result in higher joblessness, can't be spun. This is pure stupidity, and will seriously harm any efforts by Congress to get a job bill passed. And also, how to pass the costly healthcare bill when the effing Democrat PRESIDENT is stomping for reducing the deficit?

I once thought Obama is a smart guy, but under the impression of evidence of stupid actions piling up, I can only conclude that he's actually a moron and totally clueless when there isn't a teleprompter in sight.

Posted by: Gray62 | January 26, 2010 11:32 AM | Report abuse

Anyone advocating for a primary challenger to Obama is advocating for the Democrats to lose in 2012. All a primary challenger does is weaken the incumbent, who ends up winning the primary, anyway. But all the ammunition that the primary challenger has fired at the incumbent weakens them for the real, partisan battle. Although it can be a good launching ground for the primary challenger later on, as Reagan mounted a primary challenge for Gerald Ford in 1976. Reagan lost the challenge, and Ford lost the election, but Reagan did come back 4 years later to win in a landslide.

So, if the goal is to launch a new rising star, then go for it. Otherwise, I'd think you'd want to give the guy at least another year to see if he can't come up with a better strategy.

Posted by: Kevin_Willis | January 26, 2010 11:36 AM | Report abuse

As for Ezra obviously thinking the CAP has a point about reducing the budget, pls note the resume of Michael Linden, the author of that clueless opinion piece: He has a "master's degree in public policy from the University of California at Berkeley"

Public Policy, huh? Not eecononics? In California, the failed state that is sinking under its budget, and ruined it's economy? Thank you very much for your inteesting opinion, but I think I stay with Paul Krugman, the Harvard prof, nobel price winner, and world renowned economist:

"It’s bad economics, depressing demand when the economy is still suffering from mass unemployment."

And even in Berkely, they disagree with the moron Linden. Prof DeLong for the rescue of his university's reputation: "This Is Such a Disaster in the Making..."

Posted by: Gray62 | January 26, 2010 11:43 AM | Report abuse

I don't think it's fair to say the left was taken by surprise with this proposal, unless you have some insight into how Communists, Socialists or at least Social Democrats would view it, were there to be any in existence around here.

I'd fairly say that liberals were taken by surprise - some, anyway - but if you must refer to us positionally, then we're firmly in the center of any reasonable political spectrum.

Posted by: eb53 | January 26, 2010 12:35 PM | Report abuse

"then we're firmly in the center of any reasonable political spectrum."

Gee. That's funny. That's how conservatives see themselves, too. Interesting.

Posted by: Kevin_Willis | January 26, 2010 12:41 PM | Report abuse

Kevin_Willis - indeed they do. The Center is valuable political territory, for obvious reasons. That's precisely why liberals should not so easily relinquish it to right-wingers.

Posted by: eb53 | January 26, 2010 12:50 PM | Report abuse

The comments to this entry are closed.

 
 
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