The 0.1 Percent Solution

26 January 2010 By James Pethokoukis

Cranky budget hawks are quick to dismiss the president’s proposal to halt spending on a sixth of the U.S. budget as a political ploy. True enough, most of the federal budget would be left untouched. But the move is at least a start to changing Washington’s freespending culture.

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President Barack Obama will seek a threeyear freeze on domestic spending in his 2011 budget that would save $250 billion by 2020, administration officials said on Jan. 25. Obama will outline the spending holddown in his State of the Union address on Jan. 27 and will spell it out in detail on Feb. 1, when he unveils his second budget.

White House officials declined to detail which agencies or programs would be hit, but said the overall freeze in socalled discretionary nonsecurity spending would not halt investment in some areas, and would be balanced by cuts elsewhere. Adjusted for inflation, the freeze would mean effective budget cuts in those areas of spending, the officials said.

The 2010 budget allocated $447 billion to nonsecurity discretionary spending, or about oneeighth of the overall budget. Agencies that could feel the pinch include the Commerce, Interior, Justice and Labor departments, as well as the Environmental Protection Agency. The United States ran a record $1.4 trillion budget deficit in fiscal year 2009. The freeze would cut the deficit by between $10 billion and $15 billion in fiscal 2011. A total of $250 billion would be wrung from the budget by 2020, they said.

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