WASHINGTON — President Obama will call for a three-year freeze in spending on many domestic programs, and for increases no greater than inflation after that, an initiative intended to signal his seriousness about cutting the budget deficit, administration officials said Monday.
Doug Mills/The New York Times
Days before his address to the nation, President Obama spoke to the Middle Class Task Force on Monday at the White House.
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The officials said the proposal would be a major component both of Mr. Obama’s State of the Union address on Wednesday and of the budget he will send to Congress on Monday for the fiscal year that begins in October.
The freeze would cover the agencies and programs for which Congress allocates specific budgets each year, including air traffic control, farm subsidies, education, nutrition and national parks.
But it would exempt security-related budgets for the Pentagon, foreign aid, the Veterans Administration and homeland security, as well as the entitlement programs that make up the biggest and fastest-growing part of the federal budget: Medicare, Medicaid and Social Security.
The payoff in budget savings would be small relative to the deficit: The estimated $250 billion in savings over 10 years would be less than 3 percent of the roughly $9 trillion in additional deficits the government is expected to accumulate over that time.
The initiative holds political risks as well as potential benefits. Because Mr. Obama plans to exempt military spending while leaving many popular domestic programs vulnerable, his move is certain to further anger liberals in his party and senior Democrats in Congress, who are already upset by the possible collapse of health care legislation and the troop buildup in Afghanistan, among other things.
Fiscally conservative Democrats in the House and Senate have urged Mr. Obama to support a freeze, and it would suggest to voters, Wall Street and other nations that the president is willing to make tough decisions at a time when the deficit and the national debt, in the view of many economists, have reached levels that undermine the nation’s long-term prosperity. Perceptions that government spending is out of control have contributed to Mr. Obama’s loss of support among independent voters, and concern about the government’s fiscal health could put upward pressure on the interest rates the United States has to pay to borrow money from investors and nations, especially China, that have been financing Washington’s budget deficit.
Republicans were quick to mock the freeze proposal. “Given Washington Democrats’ unprecedented spending binge, this is like announcing you’re going on a diet after winning a pie-eating contest,” said Michael Steel, a spokesman for the House Republican leader, Representative John A. Boehner of Ohio.
The spending reductions that would be required would have to be agreed to by Congress, and it is not clear how much support Mr. Obama will get in an election year when the political appeal of greater fiscal responsibility will be vying with the pressure to provide voters with more and better services. The administration officials said the part of the budget they have singled out — $447 billion in domestic programs — amounts to a relatively small share, about one-eighth, of the overall federal budget.
But given the raft of agencies and programs within that slice, the reductions will mean painful reductions that will be fought by numerous lobbies and constituent groups. And not all programs will be frozen, the administration officials said; many will be cut well below a freeze or eliminated to provide increases for programs that are higher priorities for the administration in areas like education, energy, the environment and health.
The balancing act of picking winners and losers was evident on Monday at the White House. Mr. Obama and Vice President Joseph R. Biden Jr. outlined a number of new proposals that will be in the budget to help the middle class. They cover issues including child care, student loans and retirement savings.
Administration officials also are working with Congress on roughly $150 billion in additional stimulus spending and tax cuts to spur job creation. But much of that spending would be authorized in the current fiscal year, the officials said, so it would not be affected by the proposed freeze that would take effect in the fiscal year beginning Oct. 1.
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