Economist Veronique de Rugy writes that President Barack Obama’s freeze on non-defense discretionary spending is a “binge diet”:
That’s right. President Obama is talking about freezing—not cutting—16 percent of the total fiscal 2011 budget. This is a small part of the budget, especially considering that this portion grew by 16.3 percent between fiscal 2009 and fiscal 2010 (and, once we include all fiscal 2010 spending, this increase will reach 24 percent). And this is on top of the 5.5 percent increase a year during each of the Bush years.
In other words, this budget freeze is akin to skipping dessert after binging at an all-you-can-eat buffet, and still hoping to lose weight.
In addition, the across-the-board freeze is so full of caveats and loopholes that it can only be seen as a joke. Here, our dieter isn’t allowed to eat desserts, unless it’s one with chocolate and whipped cream.
For instance, the freeze won’t apply to the $513 billion in unspent stimulus funds. Nor will it apply to the $247 billion of Troubled Asset Relief Program funds or to any of the programs that cash from repaid TARP funds will pay for, such as the $30 billion to prop up community bank lending to small businesses proposed by the president during his speech.
She also notes that the proposal has been met with skepticism by more liberal congressional Democrats. So it’s likely that the proposal will not go anywhere.
And let’s not forget that $250 billion over ten years is nothing in terms of long term deficits. Some conservatives have given kudos to the president for doing this. We need much more than a freeze in discretionary spending, we need deep spending cuts. President Obama can complain about the previous administration all he wants, but he is simply carrying over the policies of his predecessor, only on steroids. He has assumed ownership of the economy and the deficits unless he starts making substanitive cuts, not just freezes, in spending.