Obama Set To Announce Plan To Freeze Spending on Domestic Initiatives
During his State of the Union speech tomorrow, President Obama is expected to propose a three-year freeze on federal funding for a range of domestic programs, administration officials announced on Monday, the New York Times reports.
The spending freeze would not apply to entitlement programs in the federal budget, such as Medicare, Medicaid and Social Security, or any Veterans Affairs or national security-related initiatives under the Pentagon, the officials said.
According to the Times, administration officials added that in addition to the freeze, some programs would be cut, including some in areas that are higher priorities for the administration, such as health (Calmes, New York Times, 1/26).
The proposal would take effect Oct. 1 under the fiscal year 2011 federal budget -- which Obama is expected to unveil next week -- and apply only to specific domestic agencies whose budgets are approved by Congress annually (Feller/Taylor, AP/San Francisco Chronicle, 1/25).
The officials noted that the portion of the budget that would be targeted for the spending freeze amounts to about one-eighth of the budget (New York Times, 1/26). The plan would require approval from Congress before it could be implemented, the AP/Chronicle reports (AP/San Francisco Chronicle, 1/25).
Savings and Impact on Health Care Reform
According to the Washington Post, the freeze would affect about $447 billion annually in spending allocations for the targeted programs and would eliminate no more than $15 billion from the FY 2011 budget (Montgomery, Washington Post, 1/26).
However, one official estimated that it initially would save $10 billion to $15 billion and generate as much as $250 billion in savings over the next decade (AP/San Francisco Chronicle, 1/25).
The Post also reports that the proposal -- which will remain in place through the remainder of Obama's first term -- is unlikely to affect health care reform legislation that currently is being considered in Congress.
During an interview with ABC's "World News" on Monday, Obama reiterated his commitment to moving forward with health care reform despite the recent spate of Democratic setbacks (Washington Post, 1/26).
Mixed Response for Proposal
The proposal likely will receive a mixed response from both political parties, the Post reports (Washington Post, 1/26).
According to the Times, the proposal likely will further upset liberals who already are angered over the potential failure of health care reform legislation and other issues on Obama's first-year agenda (New York Times, 1/26).
However, moderate Democrats -- particularly those who are in tight re-election races this midterm -- have indicated their support for such a freeze (Clarke, CQ Today, 1/25).
Michael Steel, a spokesperson for House Minority Leader John Boehner (R-Ohio), said, "Given Washington Democrats' unprecedented spending binge, this is like announcing you're going on a diet after winning a pie-eating contest" (New York Times, 1/26).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.