by Bill McBride on 1/25/2010 07:56:00 PM
Monday, January 25, 2010
From McClatchy Newspapers: Officials: Obama will propose three-year spending freeze
President Barack Obama will propose a three-year freeze in non-security discretionary spending, senior administration officials said Monday.This is an important issue, but I'd rather wait to address the deficit until after we see clear signs of a recovery.
His budget proposal, to be unveiled in part with Wednesday's State of the Union speech and in detail next week, will urge Congress to keep overall spending at $447 billion a year for agencies other than those charged with national security and mandatory-spending programs such as Social Security and Medicare.
The freeze would take effect with the 2011 fiscal year starting Oct. 1 ...
It also wouldn't affect a 154 billion [dollar] jobs plan pending before Congress and backed by Obama, the officials said. One aide said that plan would be exempt because it would take effect this year, before the freeze.
Administration officials, who spoke on the condition of anonymity to not upstage the president, said that the three-year freeze would save $250 billion over a decade — if it's approved by an election-year Congress.
After three years, the total spent would be the lowest as a percentage of the total economy in 50 years. Spending on those agencies has increased by an average of 5 percent a year since 1993, the officials said.
Note: I have a long history of being a deficit hawk, but I don't want to see a repeat of the mistakes of 1937, see: A comment on the Deficit and National Debt
Posted by Bill McBride on 1/25/2010 07:56:00 PM