As you no doubt have heard by now, President Obama is expected to announce a non-defense discretionary spending freeze in tomorrow’s State of the Union address. Given that we’re only kinda, sorta on the way to recovery — and that spending freezes are not typical Democratic Party policy — this is obviously a terrible, awful idea that proves the firebaggers right and Barack Obama hates the left and Rahm Emanuel delenda est, right?
It depends on what the meaning of “freeze” is. Indeed, under certain conditions, this could be a great idea.
Before you try me for heresy, read this bit of reporting by Jonathan Chait:
Within the administration, White House budget director Peter Orszag appears to have settled on another solution. Last month, Orszag raised eyebrows when word leaked that he’d asked most cabinet agencies to prepare two budgets: one that freezes spending, the other that cuts it by 5 percent. Many congressional liberals were livid, and, according to multiple sources, Larry Summers’s National Economic Council reacted negatively to the emphasis on the deficit. (“The economic team has a healthy debate about most major issues,” says an administration official. “Getting people back to work is central to addressing the deficit. Similarly, putting the country back on a fiscally sustainable path is vital to confidence in the economy.”) The concern among wonks outside the administration is that clamping down on domestic discretionary spending without touching entitlements would take money out of the economy in the short term while doing nothing to close the long-term deficit.
These same liberals and wonks rejoiced when Obama backed job creation. But there is a logic to Orszag’s gambit, which runs roughly as follows: It’s almost certain that Congress will pass, and the president will sign, a jobs bill early next year, probably in the neighborhood of $100 billion to $200 billion. Given that, and given the difficulty of doing anything about the long-term deficit next year, the administration needs some signal to U.S. bondholders that it takes the deficit seriously. Just not so seriously that it undercuts the extra stimulus.
My guess is that this is the plan — announce, with great fanfare, a “spending freeze” that covers basic departmental budgets and not much else. A freeze that doesn’t come within a furlong of covering the cost of a jobs bill. It’s brilliant politics — you get all the benefits of posing as deficit hawks without any of the actual deep spending cuts (including, it can not be stressed enough, defense) and/or tax increases that a real attack on the deficit would require. Actually, since this is how deficit hawks really behave (when’s the last time Joe Lieberman suggested actually cutting defense? Or Evan Bayh floated a tax hike?), you simply become deficit hawks. And as we all know, deficit hawkishness is A Very Good Thing In Official Washington. Obama’s bound to get great press out of this.
What’s more, eventually, cuts are going to be necessary, as will tax increases. Not now — actually taking on the deficit in the midst of a deep recession would be catastrophic. That said, at some point, some day, we will have to take the deficit on. And that will require dealing with the budget like responsible adults, not Americans. A relatively small, symbolic cut this year to offset a jobs bill and a health care expansion isn’t a bad idea, politically and policywise.
But that’s the key — the Obama Administration can and should find ways to reach out to the center. But they also have to find a way to energize the left. Failing to pass a health care bill would be catastrophic; it guarantees a GOP takeover of at least the House come fall. Passing a health care bill, a jobs bill, and a repeal of DADT while simultaneously limiting other spending growth? That’s a trade that liberals can and should be willing to make.
Of course, if there’s no quid pro quo — if this is a spending freeze just for the sake of freezing spending, and if no jobs bill or health care bill is forthcoming — then it should be rejected out of hand. There’s making a play for the middle, and then there’s rank stupidity. I’m going to bet that the Obama Administration isn’t stupid. But we’ll see.