Morning Report: President Obama Proposes Spending Freeze

Responding to concern over the increasing deficit, President Obama plans to freeze spending on some domestic programs. The freeze would affect just small portion of the budget, $447 billion in spending, but the White House estimates it could save $250 billion over the next decade. Programs like Social security and Medicare would be exempt from the cuts, as would the military and other programs related to national security. The president is expected to propose his spending freeze during Wednesday's State of the Union. During which he is also expected to announce plans to create a deficit commission, a bipartisan task force that would look for other ways to curb the $1.4 trillion deficit.

Gross domestic product in the U.K. rose 0.1 percent in the fourth quarter, pulling the country out of its longest recession on record. The Office for National Statistics said "the increase in output was due mainly to increases in distribution, hotels and restaurants and government and other services."

The service industry which makes up 76 percent of the country's GDP, grew 0.1 percent on the quarter. But as Bloomberg reports, the growth of 0.1 percent was much smaller than most analysts had expected:

"It's clearly disappointing," Simon Hayes, chief U.K. economist at Barclays Capital and a former Bank of England official, said in a telephone interview. "The recovery is going to be uneven. I think the Bank of England will halt quantitative easing in February, but if we don't see sustained growth it's likely we may see them extend it in the middle of the year."

The U.K. economy shrank 4.8 percent in 2009, the biggest drop since records began in 1949.

The latest S&P Case Shiller index shows that home prices in 20 major U.S. cities fell 5.3 percent year over year in November. It's hard to find bright spot in these numbers but the index tries: "[this] is the third consecutive month these statistics have registered single digit declines, after 20 consecutive months of double digit declines." Only five markets in the index saw price increases in November while four cities, Charlotte, Las Vegas, Seattle and Tampa posted new record lows.

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