Teh Twitter is abuzz with posts on the rumor that Barack Obama will be announcing a “spending freeze” on discretionary spending during the State of the Union address. Pay close attention to the words: discretionary spending. The word on the street is that his request will exempt “the Pentagon, veterans programs, foreign aid and homeland security” from this so-called “freeze.” There are a couple of key items to consider:
- What exactly does he mean by “freeze?” Does it mean “freeze the level of spending at the bloated 2009 numbers”? Or does it mean “don’t increase these programs any more in 2010 than we did in 2009? Or does it mean “stick to historic growth levels, rather than Obama-caliber spending increases”? Inquiring minds want to know.
- Discretionary spending means non-entitlement spending. When you subtract out entitlements: Medicare & Social Security, and then you subtract defense-related spending, there is precious little left. In fact, it comes out to less than fifteen percent of the federal budget.* Barack Obama’s so-called “stimulus” program totaled around $750B – that’s almost 50% greater than the entire non-defense discretionary budget for 2009. Freezing 15% of the federal budget is a drop in the bucket. (see page 8 of this PDF)
Note one other key item in that Federal Budget PDF document. As of the year 2017, “Net Interest” – the interest paid on the national debt – exceeds ALL non-military discretionary federal spending. If Barack Obama wanted to have a real impact on the federal budget, both now and in the future, he would cease and desist from these so-called “stimuli” that are doing little or nothing to fix the Obama Recession.
To propose a spending freeze of any sort is good political theater for Obama, but it will have virtually no impact on the financial standing of the United States of America.
* – 15% = $586B non-military discretionary spending / $3801B total outlays in 2009. I was right in the first place.