In tonight's State of the Union, President Obama will propose to freeze discretionary, non-defense spending at current levels for five years. I believe ABC News' Jake Tapper was the first to report the story. Administration officials are now confirming it, via statements like this:
As a down payment toward reducing the deficit, the President is calling for a five-year freeze on non-security discretionary spending. In areas outside the freeze, we also will be looking for cuts and efficiencies. For instance, the President is putting forward a five-year plan developed by Secretary Gates to achieve $78 billion in defense savings.
What is discretionary spending? It's funding to help states run public schools, to finance the operations of the Environmental Protection Agency--basically, all the money that doesn't go to programs like Medicare and Social Security, whose funding rises automatically as demand for the programs increase.
And what would it mean to freeze discretionary spending for five years? The exact parameters of the freeze aren't clear, but presumably it would mean keeping funding for those programs at the same level they are now, without adjustments for inflation or population growth.
Overall, discretionary spending isn't a huge chunk of federal spending; it's about a sixth of the budget, depending on how you count. And President Obama has already called for a similar spending freeze that was supposed to last for three years. By announcing a five-year freeze tonight, he's merely embracing the freeze for another two. But adding those two years in no small thing, when you consider the effects of compound interest: Freezing spending at 2010 levels has a much bigger effect in 2015 than it will in 2013.
If funding in 2015 is the same as it is now, those programs won't be able to provide the same level of services (since those services will usually cost more, thanks to inflation) or serve the same number of people (since there will usually be more people dependent on the programs, due to population growth). Schools will have less money to buy supplies and pay teachers. The National Institutes of Health will have less money to underwrite medical experiments. And so on. That's why people like me frequently refer to spending freezes as cuts.
Of course, there are some programs that really deserve cutting. And Obama's cuts would surely be less severe than what the Republicans have in mind. They want to reduce spending to what it was in 2008.
And the Republican plans don't seem to have the same flexibility. Obama's cut is flexible: Overall non-security discretionary spending wouldn't exceed 2010 levels, but spending on individual programs could still go up or down within that framework.
But is Obama's proposal the end of the conversation--or the beginning? Has he just set the upper limit on spending? And, if so, isn't this another case of the Obama Administration compromising with itself?
Time will tell, I guess. But right now I'm not too happy.
Update: I originally wrote that the freeze would keep spending at 2011 levels. It's 2010 levels, as the item now states. Also, I mentioned that the freeze allows some flexibility: Congress can decide to increase or decrease spending on specific programs, just as long overall non-defense discretionary spending stays within the cap.