Blog Noir: Spending Freeze = "The Worst Idea Ever (That Didn't Come from John McCain)"
President Obama has a plan to freeze non-discretionary spending for the next three years and Jamelle of PostBourgie thinks that's just about the worst idea ever.
I don’t understand this at all. If there’s any portion of the federal budget that’s amenable to freezing, it’s defense spending, which eats up the vast majority of discretionary spending. Non-defense discretionary spending amounts to a scant 1/6th of the federal budget, and the majority of it goes towards programs that benefit millions of poor and middle-class Americans. And because those programs — unlike agricultural subsidies — don’t have powerful lobbies or influential advocates, they are the ones most likely to be cut by the Republicans and “centrist” Democrats that will end up controlling the process (since President Obama will probably take a hands-off approach to this too).
What’s more, I don’t see how this will do anything to close the deficit. The vast majority of the long-term deficit is a product of under-taxation and growing health care costs. And assuming a major tax increase/revamping of the tax code isn’t going to happen anytime soon, the single best thing the Obama administration could do to reduce the deficit is to pass the Senate health care bill, which is projected to substantially lower the deficit over the long-term.
As if that weren't enough, Jamelle takes exception with the move on a more fundamental, political level
Policy aside, this is bound to be a political disaster. The American people don’t give a sh*t about deficits, and insofar that they do, it’s because large deficits are associated with economic hardship. Health care aside, the most important thing the administration can do, politically, is reduce unemployment. What they’ve chosen instead is to pursue a policy that will take money out of the economy, and push unemployment upwards. The nearest parallel is FDR’s attempt to balance the budget in 1937; the immediate impact of which was to plunge the economy into a second Great Depression. Which is another way of saying that if Obama goes through with this, he’s not only is he looking at an even worse economic picture, he’s essentially forfeiting the party’s majority and ensuring a one-term presidency.