Derek Thompson: What Obama Will Say (and Won’t Say) in the State of the Union

Posted by Kendall Harmon

Three Year Spending Freeze

Will Say: "The budget oversight of the last ten years, followed by the Great Recession, followed by federal government's swift and successful efforts to end the recession, have put America's finances in a terrible hole. Our current deficit is necessary. But it is also gaping and unsustainable. There are many things we need to do to fix our national balance sheet, but the first step is to tie a belt around federal spending. That's why I'm proposing a three-year freeze on all discretionary spending not directly related to our national security. It is not sufficient to solve our deficit crisis. But it is a necessary and important start. "

Won't Say: Obama knows that everybody is worried about the deficit -- moderates, Republicans, bondholders. We can't do anything non-gimmicky and substantive because Republicans won't raise taxes and Democrats won't cut services. So here's something gimmicky and mostly without substance. We're freezing less than 25% of the budget, which should save $15 billion in a year where the deficit is expected to pass $1.3 trillion.

Read it all.

Filed under: * Economics, Politics • Politics in General • Office of the President • President Barack Obama

2 Comments
Posted January 27, 2010 at 6:33 pm [Printer Friendly] [Print w/ comments]



1. Cennydd wrote:

The freeze on spending with regard to COLAs for veterans has already had an effect, and the same applies to Social Security recipients.  I assume it will also have an effect on medical procedures and treatments at VA hospitals and on Medicare-authorized procedures and treatments as well.  One can’t help but wonder just where this freeze will stop.

January 27, 8:19 pm | [comment link]
2. Branford wrote:

I don’t think that was a freeze, Cennydd. My understanding is that COLAs are directly tied to the inflation rate, and since last year saw no inflation, there was no COLA for Social Security (I don’t know anything about veterans benefits, but maybe it’s the same scheme). If there is inflation this year, then the payments would be adjusted.

January 27, 10:45 pm | [comment link]
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