Obama wants to snip discretionary spending

U.S. President Barack Obama addresses a Joint Session of Congress while delivering his State of the Union speech January 25, 2011 in Washington, D.C.


Kai Ryssdal: So there I was last night, watching the State of the Union, and just about the time the president was saying this:

Barack Obama: Tonight I am proposing that starting this year, we freeze annual domestic spending for the next five years. This would reduce the deficit by more than $400 billion over the next decade.

Just about then, I was reading something interesting on my laptop. A plan by Kentucky Senator Rand Paul to cut spending a whole lot more. $500 billion in the next eight months. He gets there by shutting down whole chunks of the government.

But between the two -- $40 billion a year for a decade, and $500 billion right now -- surely there's a middle ground. Here's Marketplace's David Gura.

David Gura: When you look at the federal budget, the part the president wants to freeze doesn't amount to a whole lot.

Maya MacGuineas: That, of course, is the smallest part of the budget.

Maya MacGuineas is a fellow at the New America Foundation. She says discretionary domestic spending covers things like roads and bridges, education and housing programs. But it doesn't include:

MacGuineas: All the various checks that the government sends out, or services it gives directly to people -- for health care, retirement, public pensions.

MacGuineas is talking about Medicare, Medicaid and social security. She says entitlement programs have to be on the table, right alongside defense spending.

Don Kettl agrees. He teaches public policy at the University of Maryland. He says if politicians want to reduce the deficit, they should follow "The Dillinger Rule."

Don Kettl: People ask John Dillinger why he robbed banks, and he said, Well, that's where the money is. And if we're interested in trying to balance the budget, we're going to have to follow the Dillinger rule and go where the money is.

But Kettl says Rand Paul's plan is too radical.

Kettl: You would have to try to tell some grandmother that maybe she can't have her wheelchair when she comes out of hospital into nursing care. You'd be talking about nothing but truly unpalatable options to be able get to numbers that large.

Still, Maya MacGuineas says Paul's plan and the president's do have something in common.

MacGuineas: These are very large cuts that they're talking about, whether you're looking at somebody like Rand Paul's proposal, or the president's. They're much larger cuts than we've seen in the past, and we shouldn't fool ourselves into thinking they're gonna be painless.

But middle ground sure is hard to find.

In Washington, I'm David Gura for Marketplace.

About the author

David Gura is a reporter for Marketplace, based in the Washington, D.C. bureau.
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I cannot believe this story uses Rand Paul on one side and the President on the other. Rand Paul is extreme, but the President's proposal is not the other extreme and Maya MacGuineas is not in the middle. You need to broaden the perspective of this story. You should talk to someone like Robert Borosage at the Campaign for America's Future (CAF). Things Borosage would like to see policy makers do to cut the deficit include: cutting subsidies to Big Oil and the pharmaceutical companies, cutting wasteful spending in the Pentagon, passing a tax to limit hyper speculation, and insuring that the wealthiest Americans pay at least the same rates as their secretaries.
CAF is looking not for a short term jolt to the economy, but for a new course, a bold direction for reviving a prosperous America with a broad middle class. In the interest of full-disclosure -- I work for the Campaign for America's Future. Call us next time. Thanks.

That was some tepid applause the shutdown got. Wasn't there a whole segment of Congress all gung ho about reducing deficit spending?

It's sure a lot of "not in MY backyard" thought.

What a shame! The U.S. is now in such dire straits that not even Marketplace can afford credible guests or editors. It was Sutton, of course, not Dillinger, as others have already pointed out. Maybe your listeners should fact-check the script.

According to Snopes.com, Sutton denied the quote in an autobiography and blamed the press for creating it.

Now the press is free to replace him with Dillinger, who has better audience recognition and the added benefit that Dillinger isn't around to deny it.

It is called "Sutton's Law" because Willie Sutton, a bank robber in the early 20th century,(apocryphally) explained from his vacation home in Ossining, New York, that he went "where the money is". Not Dillinger, sorry.

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