President Obama recently delivered his State of the Union address and touched on a lot of topics. I will admit that he has both short term and long term goals that he wants to accomplish but the one that I was asked to blog on was his proposal of a 5 year spending freeze. Now, before I start talking about this idea, I have to establish a base as to the purpose of the budget before I start talking about his plan.
In previous blogs, I talked about the federal budget and what it was (For a recap, please read previous blogs on New World Order). Now, the federal budget is devised by the Executive Branch of the federal government. It is then “tweaked” by the Legislative Branch of the government. So ultimately, even though it’s a joint effort, Congress will set the budget. So, let’s talk about the plan:
Obama wants to put a spending freeze on non security, discretionary spending. To understand what this is you have to understand that there are two types of spending in the federal budget. That is mandatory spending and discretionary spending. Mandatory spending goes towards programs that are required by law to provide certain benefits. The majority of mandatory spending goes to social security, medicare, and Medicaid. Discretionary spending is money that the Executive and Legislative branches negotiate over as part of the budgeting process. You see technically, there is laws in place that state that social security, medicare, and Medicaid should provide certain services. They could possibly adjust how much is paid out for those services but those services have to be covered by law. On the other hand, things like education, defense, and transportation aren’t covered by such laws. These are programs that the federal government gives money to at their “discretion”. Get it? Now Obama wants to put a spending freeze on those programs. You can get a list of those programs easily by googling “2010 federal budget”. I would do it but it’s just too long for this blog. I do have a couple of points that I want to make about 2010 before I continue with his proposal (yes I know this is long and boring but you have to understand the base before you can understand the plan so I’ll just throw in a joke here to keep you interested)
What do you call a defective boomerang?
A stick.
OK let’s continue: in 2010, discretionary spending was estimated to cost about $1.4 trillion with over $700 billion going to defense and homeland security. So, a few programs get half while the other 20+ get the other half and that’s the half that Obama wants to put a freeze on. Departments like Education, Transportation, Housing and Urban development, Health and Human Services, Veteran Affairs, Labor, Treasury, etc….. Now this proposal has some snags in it when I do my research.
First, he really touched on education during his speech so I will be watching to see if he really cuts spending with Education or does something to promote hiring more teachers in the coming years. Next, I will also be watching Housing and Urban Development to see if anything changes with the dream of Americans becoming home owners. Also, as a PA, I will definitely be checking on Health and Human Services budget with the passing of this healthcare law. I believe since it is a law that spending will somehow be mandatory spending now as opposed to discretionary spending but I am not sure about that one. I’m not saying he can’t do it; I just want to know where this estimated $200 billion dollars we will be saving over 10 years is coming from.
One more point, The Republicans have already thrown the gauntlet down for this plan. As I discussed before, we always spend more than we bring in so maybe this whole budget and spending freeze is pointless right? Well, our House majority leader Jim Boehner has already hinted to having a “spending cap” placed on certain programs to make sure we don’t go over budget. The republicans want to reduce spending and it looks like they are taking Obama’s plan and saying “we want more cut before we vote with you”. This will get interesting because initial cuts are being aimed at everything from the FBI to Head Start programs. Ladies and gentlemen, this blog is long but if there ever was a time to start looking at what will and will not be funded this fiscal year, NOW is that time!