Don’t get fooled by spending freezes and populism

Posted on January 26, 2010


President Barack Obama makes his first official State of the Union address tomorrow evening, and commentators on the left and right are buzzing with his potential content tomorrow on the heels of a devastating Democratic defeat in liberal Massachusetts, an election which has put the brakes on the President’s premier domestic proposal and highlighted the frustration and anger many in America felt over the entire health care reform process and continued unease over the economy.

To assuage voters’ concerns, it appears that the President will be striking a populist tone in the speech, railing against big banks and lobbyists, and offering up a fig leaf of fiscal conservatism in the form of a spending freeze in all discretionary spending. In theory, it’s a step in the right direction, but we should all be honest with ourselves about the sincerity and the motives behind such an offer.

The proposed cuts (and remember these may turn out to be just cuts in the percentage of growth) is being touted as saving $250 billion over the next 10 years. That’s certainly a great deal of money that could be saved, and it’s progress to be sure – but let’s keep things in perspective. We are currently running monthly deficits of $200 billion – those savings would be wiped out in a month or two of our current budget.

And should we really applaud a fiscally responsible move from an administration that over its 2009 and 2010 budgets will post nearly $3 trillion in budget deficits? The President is acknowledging that spending is out of control, but offering only token cuts as political theater. Until I see more meaningful action on our budget deficits and national debt, I remain unconvinced that this administration is more concerned with passing agenda items than being responsible with our tax dollars.

As for the populism, it’s nothing more than another attempt to raise boogeymen that will deflect criticism away from the missteps of this administration. You can say you’ll fight for the middle class by taxing the banks, but it’s hard to take it seriously when you install the New York Fed chair as your Treasury secretary and lobby hard to get the second half of TARP paid out on schedule.

It will be interesting to see how the final speech actually plays out tomorrow, but nothing I’ve seen as yet indicates to me anything beyond a continued blame game and a shift of responsibility for a faltering economy and record budget deficits. The tone of the speech tomorrow may be fiery and articulate, but don’t be fooled by the rhetoric – actions mean more, and I believe after the last year, the American electorate aren’t as easily swayed by Obama’s campaign-style speeches as they were in 2008.

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Posted in: News, Politics