How's That Budget Freeze Working Out?
Reason columnist and Mercatus Center economist Veronique de Rugy does some quick math on President Obama's proposed freeze on spending over at The American:
The three-year freeze over the course of ten years will save on the order of $250 billion. That amounts to only 0.58 percent of the total federal spending during that period. This seems a rather meek savings especially in light of the CBO data showing ten-year baseline deficits of $6 trillion under current laws….
President Obama outlined a menu of small initiatives aimed at helping middle-class families (increasing child care tax credits) and small businesses (such as eliminating the capital gains tax). He also outlined larger infrastructure initiatives and green energy initiatives. All these measures would be part of a new job bill, which he told Congress he is expecting on his desk soon.
He also announced a series of spending measures to bolster education spending, boost community college education, make college affordable, and expand Pell Grants. He proposed to require that students never have to spend more than 10 percent of their income each year repaying their student loans and to give debt forgiveness to those going into "public service."
Finally, he asked Congress to pursue healthcare overhaul….
The total cost of all of the measures will definitely be well over $250 billion over the next ten years. How is that a freeze? Where are the cuts coming from?
The short answer? Nowhere.
