Belmont Club

Hatchet vs scalpel

The LA Times reports that President Obama plans to freeze spending to help ease the financial crisis.

To counter the soaring federal deficit, which polls show is a major factor in voters’ discontent, Obama will announce that the budget blueprint he files next week will contain a “hard freeze” on discretionary spending that lasts through 2013, an effort his advisors liken to the fiscal discipline average families impose on themselves every day.

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He sounded different on the campaign trail, but there’s nothing wrong with admitting to mistakes. However, if the President decides to go through with his health care “reforms” as currently envisioned the freeze will mean nothing. Freezing expenses won’t pump the water out of the bilge. Plus, closer analysis shows that the “freeze” applies to items controlled by Congress and don’t amount to much anyway. ABC News reports:

The spending freeze, expected to be proposed by Obama during the State of the Union address on Wednesday, would apply to a relatively small portion of the federal budget, affecting a $477 billion pot of money available for domestic agencies whose budgets are approved by Congress each year. Some of those agencies could get increases, others would have to face cuts; such programs got an almost 10 percent increase this year. The federal budget total was $3.5 trillion.

The freeze on so-called discretionary programs would have only a modest impact on a deficit expected to match last year’s $1.4 trillion. The steps needed to really tackle the deficit include tax increases and curbs on benefit programs like Medicare, Medicaid and Social Security.

Obama was once contemptuous of “across the board” freezes. Watching the Senators McCain and Obama again after a year and half, one realizes that it was unrealistic to think that government was capable of fine tuning anything. The “scalpel” may not exist. Either the government gets things generally right or generally wrong. It’s too huge an organization to adapt itself very much. So either government goes decisively for deficit reduction or it doesn’t. The idea it can finesse things may be be unrealistic.


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