No new programs: Obama to propose spending freeze

Gautham Nagesh Contributor
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President Obama will propose a three-year freeze on discretionary spending for civilian agencies, The Daily Caller confirmed on Monday. The proposal is an attempt to curtail the growing federal deficit and should appeal to fiscally conservative Blue Dog Democrats, though it may provoke a backlash among the party’s liberal wing.

Since Defense spending consumes more than half of the budget the actual impact is relatively small; the Wall Street Journal reports that only 17 percent budget will be affected:

The administration officials said the cap won’t be imposed across the board. Some areas would see cuts while others, including education and investments related to job creation, would realize increases.

Among the areas that may be potentially subject to the cuts: housing and urban development, Justice, energy, transportation, agriculture, and Health and Human Services.

The news also signals the president may be moving towards the center on issues such as climate change and health care, despite the ambitious policies the White House laid out in those areas last year. It’s still unclear but it appears the spending freeze would hold civilian agencies to the fiscal 2010 spending baselines established in the $447 billion omnibus spending bill President Obama signed in December.

The 2010 budget represented an almost 10 percent increase over the Bush administration’s last budget for fiscal 2009. But due to the length of the budget formulation process the fiscal 2010 budget was mostly created under Bush, meaning the Obama team will have limited opportunity to make an impact at the federal level on key issues including housing policy, energy and transportation.

Areas such as defense, homeland security, veterans affairs and entitlements are unaffected by the freeze. The AP reports that White House officials expect the cuts to save between $10 and $15 billion a year initially. The fiscal 2010 budget Obama submitted to Congress totaled $3.6 trillion.

Obama’s stance on spending freezes during 2008 presidential campaign