Monday, January 25, 2010

Obama Further Capitulates to the Right by Calling for Budgetary Spending Freeze on Domestic Programs


The abject political confusion, desperate ineptitude, and sheer cowardice that is beginning to characterize the Obama Administration continues to escalate at a dizzying pace. This is what happens when you allow your enemies to dictate on their terms what you should do and how you should do it. This "freeze" is a brazen straightup sellout of the political, economic, and social interests of 95% of the American people. There is no other way to describe it. This blatant capitulation to the right is completely indefensible and a clear indication that we have a President who is currently not prepared or willing to do what needs to be done to change the suicidal direction of this country...


January 26, 2010

Obama Seeks Freeze on Many Domestic Programs
New York Times

WASHINGTON—President Obama will call for a three-year freeze in spending on many domestic programs, and for increases no greater than inflation after that, an initiative intended to signal his seriousness about cutting the budget deficit, administration officials said Monday.

The officials said the proposal would be a major component both of Mr. Obama’s State of the Union speech on Wednesday and the budget that he will send to Congress next Monday for the fiscal year 2011 that begins in October.

It would cover the agencies and programs for which Congress allocates specific budgets each year, from air traffic control and farm subsidies to education, nutrition and national parks.

But it would exempt the Pentagon, foreign aid, the Veterans Administration and homeland security budgets, as well as the entitlement programs that make up the biggest and fastest-growing part of the federal budget, Medicare, Medicaid and Social Security.

The payoff in budget savings would be small relative to the deficit: The estimated $250 billion in savings over 10 years is less than 5 percent of the $9 trillion to $10 trillion in additional debt the government is expected to accumulate over that time.

The initiative holds political risks as well as potential benefits. Because Mr. Obama exempts military spending while leaving many popular domestic programs vulnerable, his move is certain to further anger liberals in his party, including senior Democrats in Congress, who are already upset by the possible collapse of health care legislation and the troop buildup in Afghanistan, among other things.

But it would signal to voters, Wall Street and other nations that Mr. Obama is willing to make some tough decisions at a time when the deficit and the national debt, in the view of some economists, have reached levels that undermine the nation’s long-term prosperity. Perceptions that government spending is out of control have contributed to Mr. Obama’s loss of support among independent voters, and concern about the government’s fiscal health could put upward pressure on the interest rates the United States has to pay to borrow money from investors and nations, especially China, that have been financing Washington’s budget deficit.

Mr. Obama’s proposal would have to be agreed to by the House and Senate, and it is not clear how much support he will get in an election year when the political appeal of greater fiscal responsibility will be vying with the pressure to provide voters with more and better services. The administration officials said the portion of the budget they have targeted — $447 billion in domestic programs — amounts to a relatively small share, about one-sixth, of the overall federal budget.

But given the raft of agencies and programs within that slice, the reductions will mean a lot of painful reductions that will be fought by numerous lobbies and constituent groups. Also not all programs will be frozen, the administration officials said; many will be cut well below a freeze or eliminated to protect programs that are higher priorities for the administration in education, energy, environmental, health and other areas.

The balancing act of picking winners and losers was evident on Monday at the White House. Mr. Obama and Vice President Joseph R. Biden Jr. outlined a number of new proposals that will be in the budget to help the middle class. They cover issues including child care, student loans and retirement savings.

Administration officials also are working with Congress on roughly $150 billion in additional stimulus spending to spur job creation. But much of that spending would be authorized in the current fiscal year, the administration officials said, so it would not be affected by the proposed freeze that would take effect in the fiscal year beginning Oct. 1.

It is the growth in the so-called entitlement programs — Medicare, Medicaid and Social Security — that is the major factor behind projections of unsustainably high deficits, due to rapidly rising health costs and an aging population.

But one administration official said that limiting the much smaller discretionary domestic budget would have larger symbolic value: It includes spending covering lawmakers’ earmarks for parochial projects, and only when the public believes such perceived waste is being wrung out will they be willing to consider reductions in popular entitlement programs.

“By helping to create a new atmosphere of fiscal discipline, it can actually also feed into debates over other components of the budget,” the official said, briefing reporters on the condition of anonymity.

David M. Herszenhorn contributed reporting from Washington.

Copyright 2010 The New York Times Company