The LookoutObama to call for spending freeze — but major items unaffected
As we told you earlier, deficit reduction will be among five "pillars" of the plan for the economy that President Obama will lay out in his State of the Union address. But it had appeared that he would offer few specifics for shrinking the budget gap.
No longer. White House officials are now telling reporters that the president will call for a five-year freeze on discretionary spending, "as a down payment toward reducing the deficit."
But the freeze appears largely symbolic. It won't affect the major contributors to the federal deficit: Social Security, Medicare, and defense spending. It also won't apply to interest payments on the federal debt, homeland security or foreign aid -- the latter being a favorite target of small government advocates, though it represents a tiny share of government spending.
The plan would save a modest $26 billion over five years, the White House says.
Separately, President Obama will get behind a plan by Defense Secretary Bob Gates to cut defense spending by $78 billion, the White House says.
(AP Photo/J. Scott Applewhite)
