How much would Obama's spending freeze trim US deficits? Not a lot.

President Obama's spending freeze proposal, outlined Tuesday, would apply to only about one-sixth of the federal budget. But at least it would be a first step, say some budget experts.

By , Staff writer

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    A man dressed as a destitute Uncle Sam begging for $12 trillion demonstrates in New York January 19. Activists from DefeatTheDebt.com set out to raise awareness of what they say is a dangerously high US debt.
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President Obama’s plan to freeze spending on many domestic government programs for three years would have only a modest effect on huge US budget deficits.

That’s because the proposal would apply to only about one-sixth of the federal budget. Defense spending would be exempt, as would foreign aid, homeland security, and huge entitlement programs such as Medicare and Medicaid.

But even the longest journeys begin with a single step, and that makes the effort worth considering, say some budget experts.

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“The president is sending a message here: 'I’m willing to do something on deficit reduction,' ” says Stan Collender, a former staffer for congressional budget committees who is now managing director at Qorvis Communications.

On Tuesday administration officials announced that Mr. Obama, in his upcoming State of the Union address, would push a nondefense discretionary spending freeze. Congress would have to approve the measure as part of its annual budget and appropriations process.

Among the parts of the government that could feel the freeze’s cold touch are the Departments of Agriculture, Energy, Health and Human Services, Housing and Urban Development, and Justice.

Not all cuts are the same

However, the freeze would not be across-the-board budget discipline, said Rob Nabors, deputy director of the Office of Management and Budget, in a conference call with reporters on Tuesday.

Instead, OMB has gone through the budget line by line, reducing some programs, leaving others the same, and increasing a few.

“When families are making decisions about tight budgets they don’t say, 'OK, we’re going to spend 10 percent less on food, 10 percent less on housing, and 10 percent less on clothing,' ” said Mr. Nabors. “Not everything is of equal importance to the country.”

The White House has a three-pronged deficit strategy, said Nabors. The first prong is the now-stalled healthcare reform legislation, which could reduce government spending on long-term health programs. The second prong is the freeze. The third is support for a blue-ribbon commission, which could sit down and look at revenues and entitlement spending, said Nabors.

“We need to be in a position where we are managing the budget and spending money more wisely,” he said.

Zeroing in on 17 percent of overall US budget

Overall, the freeze proposal would affect a $447 billion chunk of the annual federal budget. That’s about 17 percent of the total.

Over 10 years, the three-year freeze would result in $250 billion in savings, according to White House figures.

Critics note that given the size of impending deficits, $250 billion spread out over a decade is a drop in a rainstorm. This year alone, emergency spending to combat the recession, combined with a drop in tax revenues, will produce a budget deficit of $1.35 trillion, according to just-released Congressional Budget Office numbers.

“While the president’s proposal is a verbal step in the right direction, you can’t climb a growing mountain with baby steps,” said Republican Study Committee Chairman Rep. Tom Price of Georgia in a statement.

Meanwhile, on the left, some liberals are worried that cuts in domestic spending could disproportionately affect programs that serve the poor and the elderly.

But unless Obama starts with a freeze on domestic spending, he might find it difficult to impose discipline on defense and other parts of the budget in coming months and years, says Mr. Collender of Qorvis.

“You’ll never balance the budget looking only at the discretionary part,” says Collender. “But if Obama wasn’t willing to make changes that would affect his Democratic constituency, he couldn’t ask other constituencies to accept reductions.”

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