Thursday, January 28, 2010

"the across-the-board freeze ... can only be seen as a joke..."

I said yesterday that "obviously, freezing spending is better than increasing it, but not as good as cutting it, and the devil's always in the details on something like that." Well, now that the framework has been proposed, Veronique de Rugy takes a look.
...the across-the-board freeze is so full of caveats and loopholes that it can only be seen as a joke...

For instance, the freeze won’t apply to the $513 trillion in unspent stimulus funds. Nor will it apply to the $247 billion of Troubled Asset Relief Program funds or to any of the programs that cash from repaid TARP funds will pay for, such as the $30 billion to prop up community bank lending to small businesses proposed by the president during his speech.

Besides, the president might ask for a freeze, but if history is any guide, Congress won’t give it to him. The president asserted his commitment to his diet by saying that he would veto any spending bill that doesn’t meet his requirement. It will be interesting to see if he can keep this promise, especially considering how unpopular this proposal was among liberals.

In the best-case scenario, the three-year freeze over the course of ten years will save on the order of $250 billion. That amounts to only 0.58 percent of the total federal spending during that period. This seems a rather meek savings especially in light of the CBO data showing ten-year baseline deficits of $6 trillion under current laws.
Yeah, that's kind of the way I expected it to be. Sounds kind of like a "gimmick," doesn't it?

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