Obama's Three-Year Freeze; Democrats' Brain Freeze

A big gamble in the president's budget

Late Monday afternoon, a small group of reporters crowded into a conference room in the Eisenhower executive office building to hear two "senior administration officials" give an embargoed briefing on what will be the most debated part of the president's budget for 2011. On Feb. 1, that budget will be released. About $447 billion will be devoted to funding the government  -- the parts that aren't mandated by law (the entitlements) or aren't related to defense, intelligence, veterans or national security issues. Obama will promise to veto any budget that exceeds that threshold, NOT adjusted for inflation, over the next three years. $250 billion would be saved over the baseline. Here's the talking point: this component of government spending will be at its lowest level relative to GDP since 1950.

This amounts to about a sixth of the entire budget. Liberals fear that discretionary spending cuts are like fig leaves with sharp edges. They're designed to cover something ugly and yet they hurt -- they hurt those who most rely on government services, who tend to be poor and non-white. The administration insist that important programs will be kept alive and functioning, and that funding for, say, education initiatives will rise, while funding for other programs will decline -- and that the president's priorities will be well-funded.  The freeze is irrelevant to health care because Medicare, Medicaid and taxes are all mandatory. So too are many of the programs for the neediest, such as unemployment insurance and Pell Grants.  And many of the other programs were plussed up recently so the White House is freezing them at a very high level. A second stimulus package wouldn't be included either.

Said one official: "Not surprisingly, given that this is the president's budget, you're going to see additional investments in areas that he believes are crucial to our medium- and long-term economic growth and to job creation over the medium term and to continued economic -- continued path of return to economic prosperity, especially for the middle class."

Entitlements? The administration's line is that they spent the past year struggling to reform health care, which would have, in the long-term, lowered the growth rates of Medicare and Medicaid. And they've endorsed a budget commission that would pressure Congress into making other cuts.

There are several ways to interpret the politics of this breaking news. One is that it is reactive and will be seen as such. The second is that it represents a serious effort at budget discipline, and providing that the president can bypass the filter of Congress, his own base, and the right wing noise machine, he could restore some credibility as a bipartisan leader.

Three: it will become poisoned by its association with Congress, which, surprise, surprise, in an election year, will be forced to make the cuts.

Four: Republicans will scoff at it for being relatively meaningless and Democrats will undersell it because they're not enthusiastic, which somehow will send a cue to the folks between the 40 yard lines (as Chris Matthews likes to say) that this the real thing. Real risk, chance of reward: small.

The big if -- IF the president really fights for this...fights against his own party, and does so with conviction -- if Democrats decide to embrace this (which is doubtful), then it could help both his party and himself.