Explaining Obama’s Proposed ‘Budget Freeze’

What’s the deal with the president’s controversial spending freeze?

Let our journalists help you make sense of the noise: Subscribe to the Mother Jones Daily newsletter and get a recap of news that matters.

This story first appeared on the ProPublica website.

Last week in his State of the Union address, President Obama announced a spending freeze. This week, he unveiled a budget that would increase federal spending by 5 percent over this fiscal year’s budget and increase the federal deficit to a record-breaking $1.56 trillion.

What gives?

The announced freeze is on most non-military discretionary spending in the federal budget, which will have a large impact on some federal agencies, but will not do much to slow down overall federal spending.
Jump to next paragraph

We at ProPublica have run the numbers, and found the freeze will impact only about one-eighth of the federal budget. What’s more, over the last 10 years the frozen portion of the budget has grown at about half the rate of non-frozen spending.

What in tarnation is non-military discretionary spending? Much of the federal budget is non-optional. Interest payments on the federal deficit must be paid, and the law establishes a legal right to Social Security benefits, so Congress can’t simply decide not to pay them. Take out that spending, and you’re left with about a third of the total federal budget that Congress can spend according to its, well, discretion.

A portion of that spending goes for defense which, while it may be discretionary, is generally not considered optional in the same way as spending for, say, the Department of the Interior.

Take that away and you’re left with about a sixth of total federal outlays. But according to the president (and clarifications by administration officials), not even all of that spending is subject to a freeze. It would not apply to the departments of Veterans Affairs and Homeland Security, nor Medicare and Medicaid, among other programs.

Subtract all those non-frozen items from the 2010 budget and you’re left with $447 billion. For the years 2011 through 2013, that will be the total budget available each year for federal departments such as Education and Health and Human Services, and agencies like the Environmental Protection Agency and NASA. The freeze means that for the years 2011 through 2013, the maximum budget for these departments and agencies will be … $447 billion. That amount is about 12 percent of the total federal budget for 2010.

Rut or cut? Because of inflation, the $447 billion will have less buying power in 2013 than it does now – so the agencies’ budgets will effectively be shrinking each year. (Inflation is currently 2.7 percent.)

How will the freeze work? Though the total budget for these programs is frozen, that doesn’t mean that they are all locked into their 2010 budgets. The administration’s budget dramatically increases spending in some areas – like education – that are subject to the freeze. That means cuts to other spending to make room under the budget cap. The president’s budget, for example, scuttles NASA’s $100 billion effort to return astronauts to the moon.

How much money will be saved? The administration estimates the freeze will save about $250 billion over the next 10 years (for various reasons the budgetary impact will extend beyond 2013).

Will it actually happen? Now that Obama has released his budget, we can see which specific programs are winners and losers. But that’s not the end of the story: Congress still needs to approve the budget. And the fiscal year doesn’t start until October, so the freeze wouldn’t take effect until then anyway.

The list of agencies and departments affected by the proposed budget freeze:

Department
or other unit
President’s
2011 Budget (Billions)
% Change
from 2010
Health and Human Services $83.5 -0.7%
Transportation $77.6 2.1%
Education $49.7 6.2%
Housing and Urban Development $41.6 -4.6%
Justice $24.1 -12.4%
Agriculture $23.9 -4.4%
Other Agencies $20.2 4.1%
NASA $19 1.6%
Energy $17.1 3.6%
Labor $14 -2.1%
Treasury $13.9 2.2%
Interior $12 -0.8%
Social Security Administration $10.1 8.6%
Environmental Protection Agency $10 -2.9%
Commerce $8.9 -36.0%
National Science Foundation $7.4 7.2%
Corps of Engineers $4.9 -9.3%
Corporation for National and Community Service $1.4 16.7%
Small Business Administration $1 25.0%
General Services Administration $0.7 16.7%
State and Other International Programs $0.1 0.0%

 

SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

payment methods

SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate