Nonprofit Newswire | On Obama and the Budget Freeze

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January 26, 2010; Financial Times | How do we make sense of President Obama’s announced three-year spending freeze on domestic discretionary programs? Based on news, pundit, and interest group reactions, you can make what you want out of the planned State of the Union announcement. It’s sort of a political Rorschach test, the freeze is what you want it to be or what you most fear it could be, your choice. For example, a commentator for the United Neighborhood Centers of America and the Alliance for Children and Families said that ‘this proposal won’t mean much for [the] Promise [Neighborhoods] and Choice Neighborhoods [programs],’ both new programs announced with great fanfare (along with the Social Innovation Fund) by the Obama Administration. UNCA/ACF has been one of the leading promoters of these programs, especially the Promise Neighborhoods effort modeled on the Harlem Children’s Zone. The proposed freeze would apply as a limit to all discretionary spending, not to specific programs within that total, so the blog concludes that “the most likely outcome is that most administration-favored programs will still experience a spending increase, including Promise and Choice Neighborhoods, [whose] increased funding will be carved out of existing programs.’ President Obama’s press secretary just about said the same according to a story on UPI, “We are investing in what we believe is important to invest in . . . We’re cutting in programs that we think have outlived their usefulness and that need to be cut. Programs that are duplicative or serve what he believes is no important purpose.” Somehow, that promise to increase discretionary programs by eliminating waste and duplication sounds similar to what previous presidents Bush, Clinton, Bush, Reagan, and Carter have also said. Perhaps this is what President Obama promised as his openness to bipartisan policy-making. Gibbs promised the freeze wouldn’t affect health care reform funding. But the President’s Congressional allies may not be quite as sanguine about the freeze. According to the Financial Times ‘Liberal Democrats reacted angrily to [President Obama’s] new focus on fiscal discipline’ while Republicans called the freeze “too little, too late.” Among the more cutting comments was this lead from the Huffington Post, “The recently announced spending freeze is another indication of just how confused President Obama is when it comes to his economic agenda for America.” But the biggest slam from the left came from Nobel Prize winning economist Paul Krugman as reported in Politico who declared the proposed spending freeze “appalling on every level,” suggesting that “[j]ust like that, Obama has embraced and validated the Republican world-view—and more specifically, he has embraced the policy ideas of the man he defeated in 2008.” Many people in the nonprofit sector reacted to the President’s budget freeze proposal with a feeling of “shock.” There’s no question that the President has to get the budget under control, but predicating that on domestic discretionary spending and giving many other equally or more expensive areas of the budget such as military spending a safe harbor from the budget axe really doesn’t make sense.—Rick Cohen