Obama Set To Call For 3-Year Freeze On Spending

President Obama is expected to propose the spending freeze in his State of the Union address. i i

hide captionPresident Obama is expected to propose the idea of a spending freeze during Wednesday night's State of the Union address.

Jim Watson/AFP/Getty Images
President Obama is expected to propose the spending freeze in his State of the Union address.

President Obama is expected to propose the idea of a spending freeze during Wednesday night's State of the Union address.

Jim Watson/AFP/Getty Images

Sobering budget deficit estimates released Tuesday are likely to give impetus to President Obama's plan to freeze government spending, but it still faces major obstacles in Congress as lawmakers from both sides push back on politically sensitive cost-cutting.

Obama is expected to propose a three-year freeze during his State of the Union address Wednesday night. It would apply to a relatively small portion of the $3.5 trillion federal budget, affecting about $477 billion available for domestic agencies whose budgets are approved annually by Congress. Such programs got an almost 10 percent increase this year.

The president's call to put the brakes on spending comes as public opinion polls increasingly reflect Americans' nervousness over the deficit.

Tuesday's report from the Congressional Budget Office projects the deficit will hit $1.35 trillion this year, slightly lower than the record $1.4 trillion last fiscal year. The nonpartisan CBO says the deficit would fall to $480 billion by 2015, assuming tax cuts on income, investments and large estates are allowed to expire at the end of this year.

But CBO Director Douglas Elmendorf described the long-term budget outlook as "bleak." The latest estimated deficit remains at levels not seen since World War II, and it would expand if Congress approves a new jobs bill and a coming Obama request for war funds.

House Majority Leader Steny Hoyer (D- MD) said Tuesday that Democrats are committed to preserving the tax cuts. He added that they should be exempt from rules requiring that any new spending or tax breaks be paid for elsewhere in the budget.

The Obama administration also wants to create a bipartisan task force to recommend steps to curb the deficit. The Senate rejected legislation to do just that in a 53-46 vote Tuesday, but the White House said it would consider forming its own panel.

Republicans dismissed the spending freeze as little more than window-dressing.

"This is like announcing you're going on a diet after winning a pie-eating contest," said Michael Steel, spokesman for House of Representatives Republican leader John Boehner.

A senior administration official told NPR that the move could save $250 billion over the next decade. The Pentagon, veterans programs, foreign aid and the Homeland Security Department would be exempt.

Some programs would get more money while others would get less — a process the administration likens to the choices families have had to make while sitting around their kitchen table.

The freeze on so-called discretionary programs would have only a modest impact on the deficit, and the proposed bipartisan task force would have helped provide political cover for the much more difficult steps needed to really tackle the deficit, including tax increases and curbs on benefit programs such as Medicare, Medicaid and Social Security.

Republicans said they opposed the panel because it would have led to big tax hikes; Democrats objected because of the likelihood it would cut benefit programs.

But a White House-appointed panel "is certainly one of the things that is being talked about," White House spokesman Robert Gibbs told reporters."What the president hopes is a continuing bipartisan effort to get our fiscal house in order."

The three-year spending freeze will be part of the budget Obama will submit Feb. 1, according to senior administration officials, who asked to remain anonymous because they were revealing unpublished details.

It is likely to face opposition from a handful of powerful lawmakers who write 12 annual appropriations bills. Accustomed to hefty increases, these lawmakers would now be asked to tighten their belts. House Appropriations Committee Chairman David Obey (D-WI) declined to comment on the plan, his spokesman said.

Sen. John McCain (R-AZ), who lost to Obama in last year's presidential election, said he supports any attempt to cut discretionary domestic spending. "We need to do so," he said Tuesday in an appearance on ABC's Good Morning America.

But McCain added that Obama "has got to veto bills that are laden with pork barrel spending, earmarks."

From NPR staff and wire reports

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