Tuesday, January 26, 2010

Obama to Announce a Spending Freeze

Well I certainly didn't see this one coming. It is being reported tonight that President Obama is set to announce a three-year spending freeze on discretionary spending...except for the military, Department of Homeland Security, Veterans Affairs or the State Department.

My initial reaction was really one of disbelief as this strategy seems like the exact opposite approach that would have the result that the Administration is hoping to achieve. The reactions from some of the more progressive blogs are quite strong:

Paul Rosenberg puts it like this:

Obama has now gone off the deep end. After passing a stimulus that most economists (not just liberal ones) said was too small, and that was made even more inadequate by being heavily tilted toward poor-performing tax-cuts, Obama is now intentionally recreating FDR's mistake of 1937, when he prematurely cut back spending to try to balance the budget, and sent the country into a new recession.

and David Sirota adds:

This is actually worse - way worse - than John McCain's campaign proposal for across-the-board cuts, as across-the-board cuts would have hit the massive and bloated Pentagon budget. Instead, the Obama administration is specifically and exclusively targeting social safety-net spending for a budget freeze (read: cut in real, inflation-adjusted dollars). Yes, cutting social safety-net programs during a recession, while increasing spending on wars, underwriting a no-strings-attached bank bailout and pushing a health care bill that is a massive giveaway to the insurance and drug companies.

Rachel Maddow also had an interesting exchange with Jared Berstein tonight on this topic:

Visit msnbc.com for breaking news, world news, and news about the economy

There will be more on this story later and it will be interesting to see the reaction of not only the Republicans, but the tea-party movement who has complained about the so-called "runaway spending" in Washington.

No comments: