Just one day before President Obama’s State of the Union Address, and one week before his administration presents its 2011 budget to Congress, the White House has announced its intentions for a “spending freeze” on discretionary spending.
That the GOP will reject the proposal is a given. Progressive observers — already upset over Democrats thumbing their noses at them throughout most of 2009 — are clearly running out of patience with the White House. What, then, can the Obama administration hope to gain with this proposal? Without the details, that’s difficult to ascertain, but here’s what we know so far:
From Talking Points Memo:
When the administration releases its budget next week, the discretionary spending for government agencies from Health and Human Services to the Department of Treasury will be frozen at its 2010 level in fiscal years 2011, 2012 and 2013.
The cuts would target “duplicative,” “ineffective” and “inefficient” spending within government, the official said on a conference call with reporters.
“This is not a blunt, across-the-board freeze,” the official said, adding that some agencies will see spending increases while some will see spending cuts as the total remains constant.
Exempted from the freeze would be Pentagon funding, and the budgets for Veterans Affairs and Homeland Security.
The initial reaction among liberal observers (myself included) was incredulous. The reported White House budget initiative – again, details are lacking at this point — seems economically counterintuitive to those on the left. Cutting government spending in the present economic climate does nothing to help Obama with what has become a major thorn in his administration’s side: Unemployment.
Economic conditions aside, the political implications of a spending freeze are difficult to decipher.
Noam Scheiber published a post at The New Republic last December suggesting that the proposed spending freeze is intended to signal U.S. bond holders that the Obama administration takes the deficit seriously. Scheiber noted that White House budget director, Peter Orszag, “raised eyebrows when word leaked that he’d asked most cabinet agencies to prepare two budgets…” One, of which, “freezes spending.”
According to Scheiber, Orzag’s request was frowned upon by members of Obama’s National Economic Council, “but there is a logic to Orszag’s gambit, which runs roughly as follows:”
It’s almost certain that Congress will pass, and the president will sign, a jobs bill early next year, probably in the neighborhood of $100 billion to $200 billion. Given that, and given the difficulty of doing anything about the long-term deficit next year, the administration needs some signal to U.S. bondholders that it takes the deficit seriously. Just not so seriously that it undercuts the extra stimulus.
Marc Ambinder posits several potential political implications of the proposed discretionary spending freeze.
One is that it is reactive and will be seen as such. The second is that it represents a serious effort at budget discipline, and providing that the president can bypass the filter of Congress, his own base, and the right wing noise machine, he could restore some credibility as a bipartisan leader.
Three: it will become poisoned by its association with Congress, which, surprise, surprise, in an election year, will be forced to make the cuts.
Four: Republicans will scoff at it for being relatively meaningless and Democrats will undersell it because they’re not enthusiastic, which somehow will send a cue to the folks between the 40 yard lines (as Chris Matthews likes to say) that this the real thing. Real risk, chance of reward: small.
Perhaps this is a signal that the White House is heeding the results of the Massachusetts special senatorial election. A conservative post-mortem analysis of why Mass. voters elected Republican Scott Brown indicates that the results were a repudiation of Congress and an unserious Democratic candidate, rather than frustration with Obama or his policies. It’s plausible that setting itself apart from Congress could be politically advantageous for the White House.
As Ambinder noted, Congress will be apprehensive about making spending cuts in an election year; indeed, they’ve already expressed their displeasure with the notion. However, if they’re unable to display a capacity for discipline, many incumbents will be running headlong into a populist buzz saw in the 2010 mid-term elections.
“The big if,” Ambinder writes:
IF the president really fights for this…fights against his own party, and does so with conviction — if Democrats decide to embrace this (which is doubtful), then it could help both his party and himself.
Lacking knowledge of what in the budget is to be frozen, Obama can expect an ear full from progressives. The president’s left flank will reject anything resembling a conciliatory gesture towards Republicans. Progressive economist and New York Times opinion columnist, Paul Krugman, has already offered his damning assessment of the proposal, arguing, “… it’s a betrayal of everything Obama’s supporters thought they were working for.” (Ouch!)
The GOP, no doubt, furthering their strategy of opposing EVERYTHING proposed by the White House, will dismiss the spending freeze outright. If they remain true to form, the more likely it is to be successful from their perspective, the more intensely they’ll fight against it.
So if the spending freeze isn’t meant to please the right or the left, it must be about the political center. Between now and the 2010 elections, the White House will have to tread a political mine field over this. The fine print of the budget proposal — some of which will come Jan. 27 in Obama’s State of the Union Address — will determine how densely populated that mine field will be.
* Max Fisher, “Liberals Agree: Obama’s Spending Freeze Just Awful.” The Atlantic Wire, 26 January 2010.
* Watch Rachel Maddow grill Jared Bernstein — progressive economist and head economic advisor for Vice President Joe Biden — shortly after news of the proposal broke:
Image via the White House Office of Management and Budget, by way of Wikimedia Commons.