Tuesday, January 26, 2010

Details on the Spending Freeze

As reported by CNN this evening, the spending freeze proposed by Obama would follow these guidelines:

Out of Scope:
  1. Defense and National Security Spendig
  2. Entitlements: Social Security, Medicare, etc.\
  3. Veteran's Programs
  4. Interest payments on the national debt.
In Scope: All other discretionary spending

When he proposed the spending freeze, and it is just "other" discretionary spending, what is left?  Education? Agriculture? Energy?

Let's put this into perspective.  According to the CBO, the annual budget is just over $3T.  Here is how the budget breaks down:
  1. 23% on Medicare and Medicaid (Not in Scope)
  2. 21% on Social Security (Not in Scope)
  3. 21% on National Defense (Not in Scope)
  4. 10% on other Mandatory (Not in Scope)
  5. 8% on Interest on the National Debt (Not in Scope)
  6. 17% other Discretionary Spending <<--- Only Spending in Scope (approx $510B)
I applaud this first step to reduce the defecit, but putting a spending freeze on 17% of the budget may not be enough.  I don't know what the answer is, but as Bill Murray said... "Baby Steps into the Elevator..."

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