Assuming President Obama really does announce a freeze of non-security domestic discretionary spending — and he still has time to back away — it does beg the question of whether the stimulus package was based on a faulty premise.

Recall that one goal of the stimulus was to compensate for the fact that the states are required to balance their budgets (this, incidentally, was a response to a public finance meltdown in the 19th century that might prefigure the American future), and thus would be forced in the absence of a stimulus to radically pare back spending. One concern conservatives have raised is that many state governments have grown at an unsustainable pace over the last two decades, and while a debt-financed federal stimulus might keep them afloat in the short term, we have no choice but to reduce structural deficits in he medium term.

So it could be that the president’s federal spending freeze and efforts to prop up state governments really do cohere — the stimulus represented an effort to buy time for state governments to get their fiscal houses in order, and the spending freeze represents an effort to stop the bleeding at the federal level as we devise a mix of deeper spending reductions and tax increases that will put us on a sustainable course over the longer term. Perhaps the stimulus was a feint. Rather than serving as a down payment on a wave of public investments, it was a strategic pause in a broader effort to right-size governments at all levels. Suffice it to say, I don’t think that this reflects the vision of President Obama and the Democrats.

The critique from the left, embraced by many within the Obama administration, has been that the stimulus was not nearly large enough, as we still have underutilized economic resources that can and should be put to good use by the federal government. One gets the strong impression that the White House has now tilted against this view.

During the stimulus debate, I took what I considered to be a centrist position, namely that we needed at least two separate bills: a stimulus bill focused on some combination of payroll tax relief, an expanded Investment Tax Credit, and targeted aid to the states that could be passed quickly and an infrastructure bill that would be the product of serious deliberation over our long-term public investment needs and potential revenue streams. Instead, the congressional Democrats pursued a messier and in my view less effective course of action. Now, I tend to think that federalizing Medicaid would have been a more appropriate move than giving aid to the states, as it would solve a long-term problem while giving the states more flexibility.

But here in the real world, the president and congressional Democrats face a real dilemma.

(1) The non-security discretionary spending freeze will alienate the left and reinforce the increasingly pervasive view that the stimulus was a staggeringly expensive misfire
(2) Democrats will counter that the health reform represented a far greater contribution to fiscal responsibility on the strength of

(a) its deep, if notional, cuts to Medicare spending

(b) and tax increases on high-priced health plans, including those of many families (union families, families in Maine) earning under $250,000

Neither (a) nor (b) are very popular with the public, particularly with that segment of the public that is most likely to turn out in midterm elections. Perhaps it is unfair for Republicans to attack Democrats on the grounds that the White House is very earnestly trying to solve thorny problems. This actually strikes me as pretty compelling. The trouble is that Republicans felt that they were earnestly trying to solve thorny problems with regards to the tax treatment of health insurance and the actuarial soundness of Social Security, and both parties have been locked in a death spiral of mistrust since at least 1994, when conservative southern and western Democrats largely vanished from the scene and the two parties became far more ideologically homogeneous.

The Democrats will succeed in turning this around. That said, I’m not sure exactly how they’ll do it.