Obama call for partial spending freeze plan sets off flurry of budget proposals

President Barack Obama's call for a partial spending freeze has set off a spate of bills from both parties that would do more to constrain spending.

Obama's plan for a 3-year freeze on non-security discretionary spending, a step the White House says is aimed at allaying concerns about record deficit levels, has served as a calling card for other lawmakers keen to show they're more fiscally responsible.

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In the Senate, an amendment restricting discretionary spending increases to roughly 1.5 percent for the next three years by Sens. Claire McCaskill (D-Mo.) and Jeff Sessions (R-Ala.) failed but won 56 votes Thursday. McCaskill, in arguing her case for spending constraints, has told reporters the president is "on board" with spending restrictions and that those opposing them are out of touch.

"America doesn't think we get it. And you know what? They're right," McCaskill said.

She and Sessions tried to attach their amendment to a bill authorizing spending for the Federal Aviation Administration after having failed by similar close margins twice earlier this year.  A more restrictive spending cap measure offered by Sen. Mark Pryor (D-Ark.) also failed, and Sen. Jim Inhofe (R-Okla.) plans to offer his own spending restraint amendment to the bill next week.

There are even more bills seeking spending restrictions in the House.

House Republican Conference Chairman Mike Pence (Ind.) and Rep. Jeb Hensarling (R-Texas) have proposed a constitutional amendment limiting spending to a level equal to 20 percent of the gross domestic product. Spending is currently nearly about a quarter of GDP.

Reps. Mike Coffman (R-Colo.) and Jim Marshall (D-Ga.) started this month the Balanced Budget Amendment Caucus that will try to revive a constitutional amendment blocking deficit spending. The proposal passed the House twice in the mid-1990s.

And Blue Dog House Democrats have proposed both a balanced budget amendment and a 6 percent cut of non-security discretionary spending.

Each of the bills would go further than Obama's freeze, which Coffman called a "joke."

"To me it's a fig leaf of an effort to contain spending," Coffman said. "The American people are so angry right now."

But budget experts said spending cuts or even balanced budget amendments would do little by themselves to fix the fiscal situation.

"All that will do is make people look like they're serious about the deficit," said Michael Linden, a budget expert at the left-leaning Center for American Progress.

The proposals are an immediate response to projections of trillion-dollar deficits over the decade, a level of red ink that the White House concedes is "unsustainable."

The Congressional Budget Office (CBO) has said Obama's budget, which accounts for increased revenue from the freeze, the expiration of the Bush-era tax cuts for high-income earners and an economic recovery, would lead to deficits averaging $978 billion over the next decade.

Those deficits would be equivalent to approximately 4 percent of GDP or greater, levels that would lead to a dangerous amount of debt that would hurt productivity, workers' wages and economic growth, CBO Director Douglas Elmendorf has said.

The expected growth in deficits will come largely from Medicare and Medicaid, which are expected to grow from being a fifth of the federal budget to 25 percent by the end of the decade, Linden said. Any deficit reduction must thus address the growth in entitlements and also call for increased tax revenue in addition to dealing with spending, Linden noted.

Anyone who refuses to acknowledge the need for tax increases to go with spending reductions to close the deficit are "deficit peacocks," he said.

White House officials have said its spending freeze, expected to save $250 billion over the next decade, is just one portion of its plan to rein in debt. To further drive down deficits, the president has created a bipartisan fiscal commission that come up with a fiscal reform plan that could include spending cuts, new taxes and entitlement reforms. Republicans in Congress have sent six members to the 18-member panel, but GOP leaders have argued that any deficit reduction measures should focus first on spending.

Marshall, a Blue Dog Democrat and member of the new balanced budget caucus, said the president and fiscal hawks are right to say the freezes and balanced budget legislation can only go so far.

"It's a step in the right direction," Marshall said. "But to suggest that this will somehow solve all our problems, that's just misleading."