What's behind Obama's spend freeze?

President Barack Obama makes a statement at the White House in Washington, D.C.

TEXT OF INTERVIEW

Kai Ryssdal: Presidents before this one have tried to limit spending. And presidents after this one surely will as well. The catch is that there is only so much of the federal budget the chief executive has any control over. It falls into the category of what's called non-defense discretionary spending. Here to tell us what that means, and how much money it might add up to is our Washington bureau chief John Dimsdale. Hey, John.

JOHN DIMSDALE: Hello, Kai.

Ryssdal: So non-defense discretionary spending is a very long phrase but in the end this does not amount to all that much of the budget, does it?

DIMSDALE: No, this is a cap on a small part of government spending, less than one-sixth of the overall budget, but it's very symbolic because it's the part that Congress has control over, that lobbyists fight over -- foreign programs, education, environmental programs. The freeze would cut only $250 billion over 10 years, but that's out of a $3.5 trillion budget every year. I think it's more calibrated to respond to the message from voters in the last few special elections that Americans are really worried about the government spending money that it doesn't have.

Ryssdal: Well, let me ask you a question along those lines. And this is going to get all macro-economic on you here, but there's a lot of economic thought that says, listen, when the economy is rough, it's probably not the time to actually cut government spending. How does that fit into the general economic picture?

DIMSDALE: Well, that's the needle that the White House has to thread. In this economy the government should be helping prime the pump, create or at least encourage jobs, but how to do that without building up debt for future generations? So the president says he's taking a scalpel rather than a hatchet to the budget. His freeze won't apply to the stimulus programs, which CDO said today is now going to cost over $850 billion because of the higher-than-expected demand for unemployment benefits and food stamps. Nor will it apply to middle-class programs that the Obama administration has been touting, or aid for states to keep local government employees on the job.

Ryssdal: So politics not really very far from his mind, right?

DIMSDALE: Sure. A lot of this comes down to telling independent voters that the White House gets it. The time has come to rein in spending, get deficits under control. But remember Congress has to go along here, and this being an election year, incumbents also want to bring home some bacon.

Ryssdal: Frame this for me, John, in the context of the larger Obama agenda. He entered office with some things he was talking about doing. Where is the money going to come from if he's going to freeze his discretionary budget?

DIMSDALE: Right. The president knew this was coming. That the bill for the bailouts and the stimulus would come due. And that he would have to trim his agenda. I think his hope was that before this happened the economy would have turned around and his reforms of health care, and maybe the energy industries, would have helped bring deficits down. But in the absence of that it seems the president will now have to pursue fewer new government programs, and instead, spend more time burnishing his deficit-cutting credentials just to help Democrats in this year's congressional elections.

Ryssdal: And we will hear more in the State of the Union tomorrow night, I'm sure, John. Our Washington bureau chief John Dimsdale on the story for us. Thank you, John.

DIMSDALE: You're welcome.

About the author

As head of Marketplace’s Washington, D.C. bureau, John Dimsdale provides insightful commentary on the intersection of government and money for the entire Marketplace portfolio.

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