There has always been a problem with the notion that the Democrats want to “pivot” to a focus on jobs and spending this year, since they champion a view of economics that argues that the way to focus on jobs is to spend more. That’s why the “spending freeze” the administration seems poised to propose, for all of its gimmickry and dishonesty, is on the whole a good thing. It is at least a way of saying that the administration would like not to be increasing spending on all fronts for the foreseeable future, which was essentially the position articulated in their last budget. Obama is effectively repudiating the premise of most of the policy arguments he made in his first year.
Champions of genuine spending restraint should treat this as a welcome tiny first step. Yes, it affects only a small fraction (about an eighth) of the federal budget. Yes, it excludes the parts of the budget whose growth is actually the core of our fiscal problem (above all entitlement spending, which if left unchecked — let alone made far far worse as the Democrats’ health-care proposals would have made it — will make the rest of our fiscal policy irrelevant before too long). Yes, it means next year’s budget would only be about one half of one percent smaller than it would have been otherwise — and will still be awfully big and growing. Yes, it would not apply to a new stimulus bill, or to new health-care spending. All of that makes it far less than a spending freeze, hardly evidence of newfound restraint, and no answer at all to the deficit projections we confront (the latest of which has just been released by CBO today, and will not make you feel good.)
But the freeze proposal, if adopted, would save a tiny bit of taxpayer money, and would complicate any effort by the Democrats to simply spend our way out of a recession: It at least makes it difficult for them to present federal spending as an unmixed blessing, and allows fiscal conservatives in both parties to begin sentences with “even the Obama administration.”
In other words, unlike the Democrats’ health-care bill, this is better than nothing. Given the state of our politics these days, better than nothing is something to be welcomed — and any hint of a desire to restrain spending should certainly be welcomed and built upon.