Obama’s Proposed Spending Freeze Would Add $3.8 Trillion to National Debt, GOP Says
(CNSNews.com) – President Barack Obama’s proposed five-year spending freeze in domestic discretionary spending would increase the national debt by $4 trillion, according to an analysis by Republicans on the Senate Budget Committee.
The freeze would lock in current federal spending, which is running a $1.5 trillion deficit. This would produce an estimated $3.8 trillion in accumulated deficits over five years, according to the GOP analysis, and potentially triple the federal debt by 2018.
Obama said during his State of the Union speech last month that the nation must get on track to a more fiscally responsible future.
“But now that the worst of the recession is over, we have to confront the fact that our government spends more than it takes in. That is not sustainable,” Obama said. “Every day, families sacrifice to live within their means. They deserve a government that does the same.
“So tonight, I am proposing that, starting this year, we freeze annual domestic spending for the next five years. Now, this would reduce the deficit by more than $400 billion over the next decade, and will bring discretionary spending to the lowest share of our economy since Dwight Eisenhower was president,” he said.
CNSNews.com previously reported that the federal debt increased by $105.8 billion in January. Based on U.S. Treasury Department numbers, fiscal year 2011 is on track to be the second highest ranking year in U.S. history for increasing the federal debt. The federal debt increased by $1.89 trillion in fiscal year 2009, making it the top ranking year for debt increase.
The U.S. Treasury Department divides the federal debt into two categories. One is “debt held by the public,” which includes U.S. government securities owned by individuals, corporations, state or local governments, foreign governments and other entities outside the federal government itself.
The other is “intragovernmental” debt, which includes I.O.U.s the federal government gives to itself when, for example, the Treasury borrows money out of the Social Security “trust fund” to pay for expenses other than Social Security.
The federal debt currently stands at $14 trillion ($14,131,051,010.84). The federal deficit, which is the gap between government expenditures and revenue, is $1.5 trillion.
Sen. Mike Lee (R-Utah) has proposed a balanced budget amendment to the Constitution. He said that the Obama administration’s proposal to freeze federal expenditures does nothing to shore up spending.
“When we look at a freeze on only one portion of the budget, you can’t really call that cutting, much as the president would have us believe otherwise and suggest we believe in his State of the Union address,” Lee told CNSNews.com.
“You don’t fight a fire in a burning building by saying we’re fighting it because we’re not pouring more gasoline on it on this corner of the building. It doesn’t work that way. As the president indicated, cuts are going to be necessary because the American people are making sacrifices and living within their means and they deserve a government that does the same,” he added.
The proposed freeze would lock in the Obama administration’s current 23 percent increase in spending, the Republicans said in their analysis. In addition, the freeze would push the country towards a total debt of $21.2 trillion by 2016, more than 100 percent of the Gross Domestic Product, the analysis says.