Obama to Seek Partial Three-Year Spending Freeze in 2011 Federal Budget After CBO Projects 2010 Budget Deficit of $1.35 Trillion

Now Obama’s worried about the deficit? It’s turns out to be all smoke and mirrors though. The freeze he’s proposing will barely touch the deficit.

WASHINGTON — A senior congressional aide says the latest estimates put this year’s federal budget deficit at $1.35 trillion.

The Congressional Budget Office figures confirm the massive problem facing President Obama and his Democratic allies just days before his Feb. 1 budget submission. The White House says Obama will propose freezing domestic agency budgets, though the savings would barely make a dent.

The deficit would slide to $480 billion by 2015, CBO says, but only if tax cuts on income, investments and large estates are allowed to expire at the end of this year. Most budget experts see deficits as far higher once tax cuts and other policies are factored in.
The 2010 deficit figure is in line with previous estimates.

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President Obama is expected to propose that Congress freeze “non-security” federal spending for the next three years, senior administration officials said Monday.

The term “non-security” is broad. It will exempt costs of the wars in Afghanistan and Iraq, all other Pentagon spending, as well as foreign aid and the budgets of the Veterans Administration and Department of Homeland Security.

The freeze will apply to the annual spending on day-to-day government programs that do not include mandatory spending on Social Security, Medicare and Medicaid. Spending on these three programs alone this year is projected to equal 8.7 percent of the nation’s gross domestic product or 59 percent of all federal spending.

Officials have defended an approach that holds entitlement spending to be harmless.

In fact, the White House appears to relish a fight, as some Democrats say they don’t want a spending freeze of any kind in an election year.

“Do I think this is going to win us lots of kudos among some on Capitol Hill,” said one official. “No.”

Administration officials said Obama will use his State of the Union address to urge Congress to impose the spending freeze for the next three budget years. If Congress follows suit, taxpayers will save $250 billion over 10 years. That figure represents what would be spent without a freeze on “non-security” programs.

Next year, a “non-security” spending freeze would save between $10 billion to $15 billion — a fraction of the current $3.5 trillion budget. In comparison, the “security” spending exempted from the freeze are as follows: $663 billion for defense, $56 billion for veterans, $43 billion for homeland security and $53 billion for foreign aid.

“We’re not here to tell you we’ve solved the deficit,” one official said, conceding this move would leave a sizable deficit behind. “You have to take steps.”

The projected 2010 federal deficit is nearly $1.5 trillion.

This spending totaled $447 billion in the 2010 budget. Senior officials said Obama will ask Congress not to dole out more on “non-security” spending than $447 billion in the budget years 2011, 2012 and 2013. This spending equals roughly a third of the overall annual federal budget.

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