EDITORIAL: Obama’s fake freeze folly
President Obama made a big deal last week about his purported federal spending freeze, but not enough has been said about how meager the supposed savings actually are. Historical context shows that any savings from this public-relations gimmick will be tiny. Frugality, apparently, is a concept Democrats have a hard time understanding.
The Obama freeze is projected to “save” $15 billion from expected spending next year. This is not a cut of $15 billion in existing spending, but only a decision not to raise spending (to match inflation) on certain accounts. Those accounts supposedly are to be frozen for the following two years as well, but they are being frozen only after a decade-long spending orgy that included an 8.2 percent increase in domestic discretionary spending this year. And they don’t apply to any new purported jobs bill or to any other new item on the president’s priority list.
Now, let’s consider the $15 billion itself. By most people’s reckoning, that’s a big number. By government reckoning, it’s child’s play. In 1995, for instance, Congress rescinded - took back - $18.9 billion that had been signed into law but not yet doled out. Whereas the Obama plan is a mere pledge not to let government grow by $15 billion in certain programs, the 1995 rescissions actually cut about $19 billion from existing programs. And that was back when the dollar was worth far more. That $18.9 billion then would be worth $26.6 billion today.
That amount was trimmed from a budget of about $1.5 trillion, making it a real, honest cut of 1.27 percent. The Obama freeze is from a much larger budget of about $3.6 trillion, meaning a paper “savings” of barely more than four-tenths of a single percent.
Look back again to 1995 and 1996. The 1995 rescissions, combined with further cuts in domestic discretionary spending in those two years, amounted to just shy of $50 billion of honest-to-goodness debt reduction - not from projected spending levels, but from prior spending levels. Using the president’s version of accounting, that Republican Congress saved almost another $50 billion - or $100 billion total - from the projected growth in spending.
Yet the cuts didn’t leave little old ladies freezing in the streets, didn’t leave orphans without food or water and indeed had no noticeable ill effects. In fact, as Congress moved toward a balanced budget, the nation’s economy boomed and, happily, the poverty rate fell. That era of progress came without government “stimulus” or “jobs” programs or bailouts or any other central-planning flapdoodle.
What the president is proposing now has the aspect of a toddler putting a single foot beyond the water’s edge at the beach for the very first time and then proudly reporting to everybody that he “swam in the ocean.” If he really wants to swim with the economic tide, Mr. Obama should learn from the 1990s that government is not the engine of prosperity and that when it comes to saving taxpayer money, boldness works far better than puny half-measures.