Hello, my name is Holly, and I’ll be your fiscal-and-economic-policy-coverage media critic here at The Audit.
Would you like freeze with that?
Predictably, President Obama’s call for a spending freeze on many domestic programs gets big play all over:
The Wall Street Journal sums it up neatly:
President Barack Obama intends to propose a three-year freeze in spending that accounts for one-sixth of the federal budget—a move meant to quell rising concern over the deficit but whose practical impact will be muted.
The White House announcement is part of a well-worn bit of Washington choreography that surrounds the president’s annual budget proposal. The rollout starts with a quasi-semi-formal release of a few details of the budget plan—this time relayed via a late-in-the-day conference call for national reporters with “senior administration officials.” Regional reporters get their own on-the-record briefing today. Next: the State of the Union address on Wednesday, the big, primetime moment for the commander-in-chief to sketch out his hopes and dreams (and say nice things about the people sitting with his wife). After that, a few more details emerge, from genuine leaks, officials on the Sunday shows, and points in between. The final element comes on Monday, cameras flashing, when the massive budget document is delivered to Capitol Hill. But that’s only for rubes.
The New York Times covers the basics of this economic and politics story well, and gives a hint as to the White House logic behind the proposal:
But one administration official said that limiting the much smaller discretionary domestic budget would have symbolic value. That spending includes 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, the official said.
“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.
In Washington, this is what is called: “strategy.”
The Washington Post digs in, but sadly returns to its habit of throwing out big numbers without the context that non-cognoscenti really need:
Obama’s commitment to cutting deficits will be an important theme of his address to Congress, administration officials said, and will be fully detailed in the budget he is due to submit to lawmakers early next week. Administration officials have declined to say specifically how the president plans to reduce deficits projected to add more than $9 trillion to the national debt during the next decade. But he has endorsed several measures aimed at meeting that goal, including the adoption of stringent pay-as-you-go budget rules that would bar lawmakers from passing programs that increase deficits and the creation of a bipartisan commission to work toward a balanced budget.
Deficits projected to add more than $9 trillion to the national debt? Could someone please connect those dots?
Let’s see. We learned today that this year’s federal budget deficit won’t be quite as big as expected, falling to $1.35 trillion from a projected $1.38 trillion, according to new Congressional Budget Office projections. Does this mean the next ten years’ worth of projections add up to $9 trillion? And that figure gets added to the current federal debt, which is hovering around $12 trillion, to give us the total projected debt picture a decade from now? This is math we all need to learn.
It’d also be nice to see these zillions expressed as a percent of GDP, for a little perspective.
In his Post blog, Ezra Klein provides a quick preview of how Obama’s freeze proposal will be received in Congress.
The way this works is simple: The administration will target worthless programs, like agricultural subsidies, in order to preserve good programs. But the reason worthless programs live in budget after budget is they have powerful backers. And those backers will rush to Congress to protect their profits. You think Blanche Lincoln, who chairs the Senate Agricultural Committee and is behind in the polls for her 2010 reelection, is going to let her state’s subsidies get gored?
And at The New Republic, Noam Scheiber, with good reason, harkens back to some reporting he did on the possibility of a spending freeze back in early December.
These same liberals and wonks rejoiced when Obama backed job creation. But there is a logic to Orszag’s gambit, which runs roughly as follows: It’s almost certain that Congress will pass, and the president will sign, a jobs bill early next year, probably in the neighborhood of $100 billion to $200 billion. Given that, and given the difficulty of doing anything about the long-term deficit next year, the administration needs some signal to U.S. bondholders that it takes the deficit seriously. Just not so seriously that it undercuts the extra stimulus.
Hmm. All about that bond market? That’s something we’d like to read more about, please. It also seems worth pointing out, as few have, that this Obama spending freeze plan firmly places the “Change” president in the “highly conventional” camp. This is about as radical as a “WIN” button.
Oh, and one more thing. This Journal headline on a follow-up story says
Budget Deficit to Reach $1.35 Trillion for 2010
But the story is about the new CBO projections mentioned above, lowering previous estimates.
Plus, according to the Journal’s own chart accompanying the story, the deficit is projected to continue to go down further, after falling from 2009 in 2010.
We understand, as the Journal says, “The CBO estimate is almost certainly an understatement of the long-term problem,” and things are expected to get worse for a lot of reasons explained in the story.
But the news here is the lower CBO projection.
So, saying the deficit will “reach” $1.35 trillion on this particular story is a bit of, um, a reach.
Holly Yeager is CJR’s Peterson Fellow, covering fiscal and economic policy. She is based in Washington and reachable at holly.yeager@gmail.com.