So, the latest collective freak-out is over the proposed discretionary spending freeze that Obama will explain in the State of the Union address and that his administration is rolling out tonight. This is supposed to a be either a reprise of Herbert Hoover’s response to the Great Depression or of Franklin Roosevelt’s disastrous 1937 budget cuts. Pour yourself a daiquiri, light a cigar…relax. You want to know how significant this is?
The administration officials did not identify which programs Mr. Obama would cut or eliminate, but said that information would be in the budget he submits next week. For the coming fiscal year, the reductions would be $10 billion to $15 billion, they said. Last year Mr. Obama proposed to cut a similar amount — $11.5 billion — and Congress approved about three-fifths of that, the officials said.
So, this year, Obama managed to cut about $7 billion in this type of funding and he is proposing to do better. If he gets 60% of what he asks again, he’ll save between $6 and $9 billion in discretionary spending next year.
This plan doesn’t apply to this year’s budget, so it doesn’t have any immediate impact on efforts to stimulate job growth.
Administration officials also are working with Congress on roughly $150 billion in additional stimulus spending and tax cuts to spur job creation. But much of that spending would be authorized in the current fiscal year, the officials said, so it would not be affected by the proposed freeze that would take effect in the fiscal year beginning Oct. 1.
What progressives should be concerned about isn’t a spending freeze that is more symbolic than meaningful. It’s the fact that Washington wants to balance the budget on the backs Medicare and Social Security recipients rather than on the backs of Lockheed Martin, Boeing, Northrop Grumman, Raytheon, General Dynamics, and United Technologies. Our debt obligations are staggering, and we have to make tough choices. This stupid spending freeze is peanuts that won’t mean anything in the larger picture. Congress probably won’t go along with it anyway.
Someone needs to have the courage to take the first pound of flesh out of the Pentagon’s budget. Since no one seems to have the back of anyone who might consider such a move, we get silly symbolism about being fiscally responsible. I don’t care about a couple of billion dollars here or there on important programs, but fixing our fiscal problems will involve a hell of lot more pain that anything being announced by the Obama administration. It’s theater, and it won’t mean anything one way or the other for our short-term employment prospects. We still need the government to spend money to make up for flagging private-sector economic activity, and this decision won’t have much impact on whether there is enough government spending or not.
The best I can say for this bit of triangulation is that it polls well and it doesn’t mean anything. The fiscal problems in Washington are endemic and unsolvable in our present system, and pretending the amount of money we’re talking about here is even a drop in the bucket is just silly.