Wednesday, during his State of the Union address Obama is expected to announce a three-year spending freeze on non-military discretionary spending. Ed Henry, Senior White House correspondent said that President Obama will propose a three-year spending freeze to begin in October. This will include all domestic programs in terms of education, health care, etc. The discretionary spending freeze will cap spending at its current level of $447 billion dollars. Discretionary spending is what congress can decide what they are going to fund and this currently accounts for 25% of the total budget.
Tuesday morning, The Atlantic has this to say about the possible spending freeze:
The year on liberal economists' minds is 1937. That's the year that FDR, seeing an economic recovery, pulled back the reigns on fiscal and monetary stimulus, causing the economy to "double-dip" into a second recession. The left is worried that, since government spending is very clearly fueling what consumer spending we've got going, tightening the federal budget could drive down the economy. You could also make the case that if the economy does turn down again after the freeze -- whether or not the freeze has anything to do with the downturn -- it will look horrible for the administration.
Many Republications seem to support the spending freeze and most Democrats are against it. One year ago, Rep. Jason Chaffetz (R-Utah) agreed with other party leaders and said:
“We’ve already done TARP, we’ve already done the stimulus, and we’ve already spent $3 trillion,” said Chaffetz from Utah. “Can’t we freeze it at that point? We already have a $3.1 trillion budget, and the majority asked for, and got, an additional $2 trillion. It’s just time to say, ‘time for a freeze.’”
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