Obama’s State of the Union Address Dampens Hope for a Real Budget Action
Kathryn Nix /
In his State of the Union Address, President Obama made several commitments to fiscal responsibility in the years to come. What do they really mean though?
President Obama’s proposed three-year discretionary spending freeze, excludes defense, homeland security, veterans’ and international affairs, is somewhat promising. The savings won’t be large — these programs comprise only one-eighth of the budget ($420 billion), and a freeze might save perhaps $20 billion (0.5 percent of the federal budget). Furthermore, these programs can still feast on their 19 percent hike over the past two years, plus their additional $311 billion in mostly-unspent stimulus funds.
Though the President deserves credit for picking some of the low-hanging fruit on spending control, if he is serious about righting the fiscal ship, he needs to take tougher actions like canceling TARP, ending the stimulus program, and turning his attention to the tsunami of entitlement programs that threaten to swamp our economy in the years to come. At a time when the deficit is $1.4 trillion and we face a sea of even more red ink, such a freeze is tantamount to bailing out the Titanic with a dixiecup. (more…)