House Democrats are rejecting an idea floated by the Obama administration to freeze or cut discretionary spending in 2011.
Key members of the House Appropriations and Budget committees told The Hill this month they would not go along with alternative spending plans being requested by White House Budget Director Peter Orszag, which are part of the administration’s plan to reduce the deficit.
Orszag last year instructed every executive department to prepare three budget requests: one that matches the 2011 spending levels set by the president in his initial budget proposal from early last year; another that would freeze discretionary spending; and a third that reduces spending by 5 percent.
But the Democrats warn that cutting or freezing spending at this point might further damage the economy. The White House should focus instead on spending government dollars to help the economy recover and bring the unemployment rate down from 10 percent, they said.
“We cannot invite a W-shaped recession, or an M-shaped recession,” said Rep. John Olver (D-Mass.), the chairman of the House Appropriations subcommittee for the departments of Transportation and Housing and Urban Development, when asked by The Hill about a spending freeze.
White House aides have said President Barack ObamaBarack Hussein ObamaTop nuclear policy appointee removed from Pentagon post: report Prosecutors face legal challenges over obstruction charge in Capitol riot cases Biden makes early gains eroding Trump's environmental legacy MORE will address the deficit, which hit a record $1.4 trillion in 2009 and is expected to average $1 trillion over the next decade, in his Jan. 27 State of the Union address and 2011 budget plan.
“The administration recognizes both the immediate imperative of helping people get back to work and also the medium-term need to restore fiscal discipline,” said Tom Gavin, a spokesman for the White House Office of Management and Budget. “We will have more to say about both in the coming weeks.”
If the administration’s budget plan includes a spending freeze or a cut, it would be a stark reversal from the 2010 budget. Republicans have criticized Democrats for adopting 2010 spending levels that will be 13 percent higher than 2009 levels.
Democrats in Congress contend any reductions should come from programs that won’t have a direct effect on those struggling through weak economic times.
“Do you think we could have a 5 percent reduction in LIHEAP?” said Rep. Robert Andrews (D-N.J.), referring to the federal assistance program to help low-income Americans pay their energy bills. “Do you think we could have a 5 percent reduction in food stamps?”
Rep. Allyson Schwartz (D-Pa.), a senior member of the Budget Committee, cautioned against an across-the-board cut.
“We should make an effort to get at what doesn’t work,” she said.
The White House will have a hard time freezing or cutting spending when Congress is trying to deal with more than just a poor economy. For example, Rep. David Price (D-N.C.), chairman of the Appropriations subcommittee that considers the Department of Homeland Security budget, said Homeland Security funding can’t be reduced when the president and lawmakers are dealing with national security lapses that allowed an alleged terrorist to board a commercial airline and attempt a bombing mid-flight on Christmas Day.
“The Dec. 25 event certainly underscores some pressing needs,” Price said.
“A flat-lined budget would be tough,” Price added. “We will do our best to allocate priorities with whatever we’re given, but I’m hopeful. It’s always better to have a slightly bigger pie when you’re balancing so many priorities.”
House Democratic leaders have said their caucus will focus on both deficit reduction and job creation in the run-up to the 2010 midterm election. The two goals aren’t mutually exclusive, leaders argued last week at the start of a House Democratic jobs summit. More jobs mean more tax revenues and lower deficits, said House Democratic Caucus Vice Chairman Xavier BecerraXavier BecerraBipartisan senators to hold hearing on 'toxic conservatorships' amid Britney Spears controversy Bottom line Overnight Health Care — FDA panel backs boosters for some, but not all MORE (Calif.).
“You can’t have long-term deficit reduction unless you have strong job creation,” Becerra said.
The latest deficit data suggest Democrats have a point. The Congressional Budget Office said the $390 billion deficit in the first quarter of fiscal 2010 is nearly a sixth larger than the deficit for the same period in 2009 because of declining tax revenues. While federal spending has stayed relatively level, tax revenues fell by 11 percent, the independent budget office said.
The White House push for deficit reduction comes as Republicans have charged Democrats with spending too much. GOP lawmakers have derided spending increases in the annual appropriations bills and the Democrats’ $787 billion stimulus, blaming those policies for adding to the $12.3 trillion debt.
A House Republican aide predicted the president will call for a spending freeze in the 12 annual appropriations bills, and then go along with more spending in emergency measures, such as a job-creation bill and Afghanistan war-funding bill.
“They’re going to send up something, they’re going to call it a freeze, but it won’t actually be a freeze,” the GOP aide said.