Whatever happened to that calm, cool, and collected candidate from the 2008 presidential campaign? This latest move is born out of sheer panic over the Scott Brown victory in Massachusetts and, by the way, something for which candidate Obama criticized John McCain for proposing during the campaign:
“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…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.
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.”
Pure symbolism over substance, and the White House admitted as much:.
“…one administration official said that limiting the much smaller discretionary domestic budget would have symbolic value.”
The budget items which will not be frozen–military spending and entitlements–plus interest payments on the debt, which cannot be frozen, amount to approximately 83% of the federal budget. In short, any cuts or freezes which don’t touch defense or entitlements are meaningless, and there’s not enough will or backbone in D.C. to tackle either one of those, especially in an election year. Much of the remaining 17%, the so-called discretionary spending, contains pet programs for virtually every member of the House and Senate. Good luck passing cuts or freezes on any of those.
But let’s just say it could be done. It would be hello 1937. That was the year FDR listened to the fiscal hawks of his day and decided to cut spending and balance the federal budget, assuming (there’s that word again) that the worst of the Great Depression was over. The result? Unemployment rose again, the economic growth of the previous 3 years was reversed, and the country slid back into what became known as the “Roosevelt Recession.”
The consequences of that recession are something President Obama might want to consider. In the 1938 mid-term elections, Democrats lost 7 seats in the Senate and 72 in the House.