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President proposes a budget freeze against the advice of his parties economists

State of the Union
State of the Union
AP Photo

During the Presidents State of the Union address he rallied support from his base on most of his policy plans with exception to one. The proposed budget freeze on services not including Medicare, Medicaid, Veterans affairs, and national security.

The President referred to his plan as an attempt at "common sense" regardless of what the economists have written in recent columns. The President argued that the effects will not take place until 2011. Sending the message that the recovery will be in full swing by the time the freeze takes effect.

"Like any cash-strapped family, we will work within a budget to invest in what we need and sacrifice what we don't" the President said in trying to convince America that the exact plan his Presidential opponent had and he defeated in 2008 is what the country needs now.

Princeton economist Paul Krugman and Robert Reich, former labor secretary in the Clinton administration, ripped Obama’s plans for limiting government spending amid high unemployment and not doing enough for middle class America. Robert Reich describes the plans as “sensible and worthwhile,” but not nearly big enough. “They pale relative to the size and scale of the challenge America’s middle class is now facing,” he says.

Instead, Reich says Obama should enact a second stimulus that’s focused on bailing out state and local governments as well as helping distressed homeowners by letting them include mortgage debt in personal bankruptcy.

“Instead of moving in this direction, Obama is moving in the opposite one,” Reich says. Budget freeze “will make it impossible for him to do much of anything for the middle class that’s important.”


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