Obama to freeze spending?
January 26th, 2010 at 3:43 pm by David FarrarPolitico report:
President Obama plans to announce a three-year freeze on discretionary, “non-security” spending in the lead-up Wednesday’s State of the Union address, Hill Democratic sources familiar with the plan tell POLITICO.
The move, intended to blunt the populist backlash against Obama’s $787 billion stimulus and an era of trillion-dollar deficits — and to quell Democratic anxiety over last Tuesday’s Massachusetts Senate election — is projected to save $250 billion, the Democrats said.
This is a massive move to the centre, if true. It would also be a very good thing economically.
So in the UK Labour are talking spending cuts. In the US, Obama is talking a spending freeze. But in NZ, Labour’s only response to every issue is to demand more spending and more borrowing.
I’ve been saying for months and months that NZ Labour do not realise the world has changed. People understand that with huge deficits, there can’t be massive spending increases, big pay increases for public servants etc.
Tags: Barack Obama, government spending, United States
January 26th, 2010 at 3:49 pm
a chick i know in Seattle works for the govt. shes just been told to take a day off every month, without pay.
imagine that happening here.
good move by Obama, theres never been a question of if he will move to the centre.. its always been a question of when.
The US is a centre right country. hence the lefties over here hate em
Vote:January 26th, 2010 at 3:55 pm
About time to. JK and BE need to not only follow suit but cut the waste in spending. IMHO every Department CEO should be told to go back to 1999 actuals add inflation and that should be the maximum budget for that Department for the next fiscal year.
That figure should then be frozen for the next 3 years to ensure they dont get lazy.
Trouble is ALL governments have become bloated.
Many NZ families have had to cut back on expenditure and trim their budgets over the past few years.
Now its the turn of the greatest wastrels central and local government both like drunken sailors.
Both need to demonstrate fiscal rigour To date that havent. Instead they cowtow to the noisy minorities.
Come on JK and BE Show some balls.
Vote:January 26th, 2010 at 3:56 pm
I don’t really care what Labour say about spending at the moment, I’m more interested in what National do about (cutting) it.
Vote:January 26th, 2010 at 3:56 pm
Eh, it’s just a gimmick. Obama will try and cut things like farm subsidies, the Republican’s will stonewall it, Obama points to the GOP and cries about how he’s trying to cut spending but the GOP won’t let him.
Vote:January 26th, 2010 at 3:57 pm
” I’ve been saying for months and months that NZ Labour do not realise the world has changed.”
They’re lost in that subterranean Marxist cave network somewhere deep below Rotorua.
Vote:January 26th, 2010 at 4:00 pm
How much of the budget is actually “discretionary non-security spending”? I’m calling it a gimmick as in government-speak most program spending (welfare, subsidies and the like) isnt “discretionary” and security is a huge part of the US budget.
Vote:January 26th, 2010 at 4:06 pm
Its the same old same old socialist confidence trick. The estimated $250 billion in savings over 10 years would be less than 3 percent of the roughly $9 trillion in additional debt the government is expected to accumulate over that time.
Vote:January 26th, 2010 at 4:18 pm
This is all gimmick, smoke and mirrors, and will cost the Democrats the mid terms.
According to the CBO, discretionary spending for 09 totalled about 1.4 Trillion, with over 1/2 being the defence budget (betcha that will not be frozen) http://www.cbo.gov/budget/approps/approps.pdf
Non-defence descr. spending is fairly stable already, and is currently predicted to fall over the next 10 years, ( See figure 4.2) http://www.cbo.gov/ftpdocs/102xx/doc10297/Chapter4.7.1.shtml#1092656
So, he gives Wall Street a Trillion dollars and a “get out of Jail free card” and regular democratic voters get education grants, housing, highways, and national parks cut to help balance the budget.
Vote:Now that is really going to get this party re-elected, Democratic voters are going to stay home in droves in the mid terms in any contest where Obama “drops in” to help out.
January 26th, 2010 at 4:19 pm
Not a very informative post DPF, as reported:
BUT: if this is a move to the centre, where is John no-spending-cut Key??
Vote:January 26th, 2010 at 4:28 pm
Pete George is right. Labour are not in government, Notional are and we see no signs from them of anything approaching ambitious policy, think BIG!
Vote:January 26th, 2010 at 4:29 pm
David, don’t get all excited. I agree with Danyl. It’s just more of the lies one has learned to expect from this empty suit.
“This isn’t news. In the budget proposal that President Obama submitted to Congress last year, his budget office already projected actual cuts and freezes in “non-defense” discretionary spending for the next three years. That’s in part because of the huge increase in that area of spending that the President requested (and received) for the current fiscal year. To be specific: FY2009 (President Bush’s last budget) had $589 billion in non-defense discretionary spending. That number jumped to $687 billion in FY2010 (Obama’s first budget), and then drops to $641 billion in FY2011, $622 billion in FY2012 and $625 billion in FY2013. So for the White House to now boast that it will freeze non-defense discretionary spending is hardly news. If anything, it’s backtracking on its earlier plans to actually cut that area of spending.”
Vote:January 26th, 2010 at 4:31 pm
An excellent post from a loyal National man, David. Softening people up for what’s likely to be a bleak Budget.
Vote:January 26th, 2010 at 4:35 pm
But the true blowouts in real terms ARE in security spending. Hmmmm.
Vote:January 26th, 2010 at 4:39 pm
I will be the usual thing – recycle paper clips, use both side of the paper etc etc. I will believe in spending cuts when Welfare is cut, and Pollies take a cut in salary and perks – both here and in the USA. Hell will freeze over! The US National Debt is $14.000,000,000,000. A saving of $250,000,000,000 is 1.785%!!!!
Vote:January 26th, 2010 at 4:40 pm
I can remember back about 15 or 20 years ago there was a bill put to the US Senate about government spending. Not to increase it but the government was suppose to be fiscal responsible and pay the national debt off. Guess how long it took to discuss this bill and then vote it down. 6 minutes. That’s even faster than voting themselves pay raises. Now the debt is 12 trillion. I believe what happened last year with the US banks is only a glimpse of what is coming. When those “greenbacks” (loan notes). come back to the US to be cashed in, that is when the shit will hit the fan. It’s starting to happen. The NZ dollar has been strong against the greenback not because of the strength of the nzd but the weakness of the US dollar. The cycle usually runs every 4 years but now it has lasted a much longer. All China has to do is ask for its money back and the US will be sunk taking the world with it.
Vote:January 26th, 2010 at 4:41 pm
Just read: “The freeze would only shave about $15 billion off of the next budget, the Post reports”.
Anyway, the question is: can John Key find 15 billion to save? I don’t care what Labour does as they’re not government. What I do care about is the weasels who are running the show now. Demonising property investors for not paying enough taxes, but unable to cut their own spending.
Vote:January 26th, 2010 at 4:44 pm
The thing is, it’s not just Labour. The majority of Kiwis want to keep the big-welfare-state entitlements. Not only that, but we want more paid holidays, more parental leave, more student allowances. The fact we can’t afford it hasn’t clicked.
National’s only option is to earn the electorate’s trust, campaign on and gain clear mandates from the electorate every 3 years, and *slowly* unwind the entitlement mentality that is now part of the majority’s physche. That, together with a dawning realisation by average Kiwis that the country is in fact sliding backwards relative to Australia and elsewhere, may do the trick. And leave dinosaur Labour well and truly exposed in the process.
The quickest way for National to *destroy* its chance to get there, is “ambitious policy, think BIG” etc as some here advocate.
Vote:January 26th, 2010 at 4:44 pm
“But in NZ, Labour’s only response to every issue is to demand more spending and more borrowing”
Interesting way of framing this. Labour isn’t in power. May as well be though.
KB and The Standard are getting more and more blindly partisan by the day.
Vote:January 26th, 2010 at 4:47 pm
Most government departments (as far as I know) are working hard to meet the Finance Minister’s targeted non-front line expenditure cuts prior to this years budget. The total reduction being sought is confidential but it is not insignicant.
Vote:January 26th, 2010 at 4:51 pm
“So in the UK Labour are talking spending cuts. In the US, Obama is talking a spending freeze. But in NZ”……..
….. Neville Key continues to spend like a drunken sailor while borrowing $250 million a week.
Vote:January 26th, 2010 at 4:56 pm
queenstfarmer (51) Says:
January 26th, 2010 at 4:44 pm
The quickest way for National to *destroy* its chance to get there, is “ambitious policy, think BIG” etc as some here advocate.
So you’re happy to be unambitious and think small? Where is the leadership, the vision and the guts? Certainly not in the Notional Party.
Vote:January 26th, 2010 at 5:18 pm
MNIJ, again you make me smile, what you think it is in the Labour party, for fucks sake….. Yes Key has Teflon shoulders, but take into account, National has to scrape our country back out of the steamy shit 9 years of Labour put us in!
Vote:January 26th, 2010 at 5:24 pm
@MNIJ
Yea.. the “vision and guts” is with the (very) minor also rans.
Talk is cheap from the cheap seats.
Vote:January 26th, 2010 at 5:38 pm
Obama is indeed an empty suit.
I wouldn’t put Key in that category though – not yet, anyway.
Key’s achievements speak much louder for him than Obama’s (non)achievements speak for him in their respective previous lives.
Let’s check Key’s performance in the lead up to 2011 election.
And also, check the alternatives – which at present, are non existant.
Vote:January 26th, 2010 at 5:55 pm
The US needs to do a lot better than a nonbinding promise to not grow spending on 17% of the budget. Its a little pathetic really considering how deep a hole they have dug themselves into.
Vote:January 26th, 2010 at 6:50 pm
Just saw Philin’s smiling face on the tele, seems Philin will be filling in for the next year. Philin has been rallying the troops and is calling for renewed and vigorous attacks on the government, my God Shonkey must be filling his pants. Do they serve good hash cookies at these Liarbore conferences or are they naturally delusional ? Liarbore shouldn’t be aloud within a bulls roar of the finance benches ever again, socialist twits.
Vote:January 26th, 2010 at 7:10 pm
The US deficit is around 12-15% of GDP . There situation is more serious than ours, thanks to Labours paying down the debt in the good years.
Vote:As well the US wants to increase the stimulus spending- overlooked by DPF in his ritual wardance against Labour.
January 26th, 2010 at 7:29 pm
So you’d rather be ambitious, think big, and spend another 3 terms in opposition? It’s that sort of “damn the torpedoes” (and damn the electorate) approach that Phil Goff must be praying National falls into.
Vote:January 26th, 2010 at 9:10 pm
When did the world change?
The rich are still getting richer
The middle class are working longer and harder
And the poor are getting poorer
I haven’t noticed any change.
Vote:January 27th, 2010 at 6:17 am
Very hard to have any real effect on the deficit when only 11% of the budget can be frozen. The stimulus is exempt as is Social Security, Medicare/Medicaid and defence spending. More smoke and mirrors I’m afraid and not the massive move to the centre you allege David.
I believe Obama is ideologically trapped. Most Americans see through his centrist veneer to his socialist core. His mellifluous speeches are becoming passe. His left wing base is loud and angry because they see their progressive dream agenda washing away and they are his fellow travellers. He has never really had to encounter or manouvre in really tight political spots and his inner political circle have all marinated in the cesspool of the Democrat one party regimes of IL and Chicago. Clinton was a more agile, dexterous and experienced politician and coming from a conservative southern state like AK, he knew how to work with the GOP and carve out a middle ground – when he was finally forced to by the 1994 Republican tide. Obama will try a series of nominal shifts (like this spending freeze) but the people will quickly see it for what it is – bogus PR shell game. The coming mid term correction will be the only thing that will finally force him to genuinely govern from the centre IMHO.
Vote:January 27th, 2010 at 7:15 am
I see some seventeen states have statutory provisions to recall their Congressmen after one year in office and force them to undergo another vote. My memory is that twelve of those have Dems in place. While such a move by states might be challenged as unconstitutional, already some have begun the legal process for congressional recall.
In short, it’s not impossible for control of both houses to change at the mid terms. A remarkable achievement for the President who just told his troops ‘this time you’ve got me.’
Vote: