Jared Bernstein: Freeze-eology 101: Hatchets vs. Scalpels

[BurtWorm]

The Obama admin's top progressive (disclosure: who happens to be a friend of mine) says the freeze they're proposing is a scalpel not a hatchet. Bernstein is Biden's chief economic adviser and the main brain behind the middle class initiative that's made news lately--and his math is usually very good and trustworthy (on the other hand, so is Krugman's, and he's opposed to this):

http://www.huffingtonpost.com/jared-bernstein/budget-freeze-eology-101_b_437277.html

So I'm on my way to do a TV interview last night on a set of middle-class initiatives we announced yesterday, when I learn that what they really want to talk about is our proposed freeze on non-security discretionary spending. Ok,I'm flexible -- and in fact, the two are related in an important way that folks need to understand.

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<T>here are two ways to do a freeze like this: (1) an across-the-board freeze on every program outside of national security; and (2) a surgical approach where overall totals are frozen but some individual programs go up and others go down. In short, a hatchet versus a scalpel.

During the campaign, you may recall that John McCain touted option 1: the hatchet approach of an across-the-board freeze.

The President was critical of that approach then, and we would be critical of it now. It's not what we're proposing. To the contrary, the entire theory of the President's proposed freeze is to dial up the stuff that will support job growth and innovation while dialing down the stuff that doesn't. Under our plan, some discretionary spending will go up; some will go down. That's a big difference from a hatchet.

Take, for example, the policies we announced yesterday -- a significant expansion (a 20% increase) in a program that provides services for seniors, like respite care and in-home services; a program to limit student loan repayments to 10 percent of income (after living expenses); an expansion of two tax credits, one for child care and another for retirement savings.

How can we expand these programs in the context of a freeze? By making sure that the freeze either holds steady or increases those parts of the discretionary budget that support jobs and income security for folks who need them, while whacking the wasteful subsidies that support lobbyists and special interests.

President Obama deeply understands the various imperatives of this moment in time, even if they don't always point in the same direction.

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