Obama's Spending Freeze is More Politics Than Purpose

The national temper tantrum displayed on the fringes of our political debate--personified by tea parties and the squawking of the deficit hawks for a budget commission--have led the Obama Administration down a political path of no good return.

At tomorrow's State of the Union Address, President Obama will propose a 3-year freeze on spending on domestic programs other than defense, Medicaid, Medicare and Social Security. On the same day the Administration announced this freeze, the New York Times ran an article about widespread food insecurity in the United States.

One in five Americans did not have enough money to buy food at some point in the last year. The level of food insecurity decreased slightly this year thanks to increased spending for the nation’s food stamp program, with a record 38 million Americans now using food stamps to feed themselves and their families. It's the kind of stimulus spending vital during an economic downturn, and a safety net that ensures our humanity doesn’t get thrown out the window every time the Dow takes a nosedive. But Obama's new plan would force states facing increasing need to do more with less.

Yet, the story of mass food insecurity is just one indication that the path our nation needs to follow is one of greater social investment, not disinvestment. With the unemployment rate in double-digits and foreclosures still mounting, our government needs to focus on paving the way toward an economy of shared prosperity. The great challenges confronting our nation are recovery in the short-term, and rebuilding in the long-term. Paying down the deficit is not inconsistent with either of these goals, but a broad freeze on domestic spending is political pandering masquerading as political leadership.

As Demos Senior Fellow Robert Kuttner argues in the American Prospect, we need more deficit spending on public investment and jobs now--we can turn our attention to deficit reduction once recovery comes. This is the prescription for long-term prosperity, and as important in an election year, it’s the right decision politically.

Fueling the debate and public anxiety about our nation's fiscal health is the sense that our government is no friend of the people. As low- and middle-income households have struggled to stay afloat, bad policymaking has only cemented this perception. For the past decade, Congress and state legislatures have chosen tax cuts for the wealthy over broad-based investments in education, research and technology or basic infrastructure. And now, with the insecurity deepening and growing in the recession, the American people are angry about spending trillions of dollars to save the very banks that brought us to the brink of another depression. Serving up a freeze on discretionary domestic spending will only further damage the government's ability to serve the common good, and really won’t make a serious dent in the long-term deficit picture.

According to the New York Times, the Administration says that by 2015 the spending freeze will result in the share of discretionary domestic spending being at its lowest level in a half-century relative to the size of the economy. This is hardly a recipe for building a competitive and prosperous economy for the 21st century, but it’s the bragging rights the Administration thinks it needs to make politically. It’s both wrong politically and substantively, a self-inflicted vise that will further constrain our nation’s ability to recover and rebuild the economy.