The Worst Idea Ever (That Didn’t Come From John McCain).

Matt Yglesias does the admirable work of explaining President Obama’s bizarre plan for a three-year freeze on non-defense discretionary spending (via Dara):

The freeze would not apply to the Department of Defense, the Department of Veterans Affairs, the Department of Homeland Security, or to the foreign operations budget of the State Department. The official emphasized that the freeze is not the only element of the administration’s plans for deficit reduction, just the only element he was prepared to discuss on this particular call. “This is only one component of an overall budget,” he said, “you’ll see other components on Monday.”

So is this an across-the-board freeze like we’ve heard Republicans call for? No, it’s “not a blunt across the board freeze.” Rather, some agencies will see their budgets go up and others will go down, producing an overall freeze effect. The senior official sought to portray this as not just a question of spending less money, but of getting our money’s worth—cutting (unspecified) ineffective programs and spending more on programs that work.

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).

12-16-09bud-f11.jpg

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.

Policy aside, this is bound to be a political disaster. The American people don’t give a shit 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.

The following two tabs change content below.
Jamelle Bouie is a staff writer for The Daily Beast, and former fellow at The American Prospect and The Nation Institute. His work centers on politics, race, and the intersection of the two. You can find him on Twitter, Flickr, and Instagram as jbouie.

Latest posts by Jamelle (see all)

2 comments to The Worst Idea Ever (That Didn’t Come From John McCain).

  • I mostly agree with you Jamelle and I can think of 20 other things I wish they were pushing up front right now, but I’m not so sure this leads to a political disaster either. Due mostly to Republican FUD the American public now thinks Obama Administration spending is the root cause of their pain. The Obama is bankrupting America meme, however patently untrue as illustrated by your graph, has stuck. The other, even more rediculous Captain Underpants bomber, say terror if you’re hard meme makes it impossible to touch defense budgets. That is a huge war all by itself and he dosen’t have the backing or the approvals to even dream of it. But this move can serve an optic purpose, Republicans have called for this and so Obama can say he acted bipartisan (which is a new meme on healthcare, that Obama didn’t reach across the aisle enough WTF!)while cornering the Rs to actually agree on something he has done and it gives the American public who seem more apt to follow the bouncing ball that spending is getting cut although the net effect isn’t really a freeze at all, its more like a reallocation.

  • [...] good folks over at Post Bourgie did a pretty good job of offering analysis, [...]

Leave a Reply