Business

The Discretionary Spending Freeze And What It Means For You

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First, the relevant facts about the budget that’s set to be released on Feb 1…

About $447 billion will be devoted to funding the government — the parts that aren’t mandated by law (the entitlements) or aren’t related to defense, intelligence, veterans or national security issues. Obama will promise to veto any budget that exceeds that threshold, NOT adjusted for inflation, over the next three years. $250 billion would be saved over the baseline.

So now…what does it mean?

Well, it’s not an overall freeze and nobody from the White House ever said it was. But the media has been reporting it is as such, and, well…yeah.

The truth is that some spending will go up, like money for health care, clean energy and education. Other spending will be go down.

More on that from TPM:

The cuts would target “duplicative,” “ineffective” and “inefficient” spending withing government, the official said on a conference call with reporters.

“This is not a blunt, across-the-board freeze,” the official said, adding that some agencies will see spending increases while some will see spending cuts as the total remains constant.

Naturally, the knee jerk blogosphere is crying foul and Krugman is up in arms

And it’s a betrayal of everything Obama’s supporters thought they were working for. Just like that, Obama has embraced and validated the Republican world-view — and more specifically, he has embraced the policy ideas of the man he defeated in 2008. A correspondent writes, “I feel like an idiot for supporting this guy.”

I’m sorry…where exactly is he embracing the policies of McCain? Because his officials decided to use the word freeze to accurately talk about the spending that won’t go up?

Jeezus…I really hate my party sometimes.

But, to the point of the post…what does mean for you? It’s not complicated. More or your tax dollars will be spent on things that directly effect the economy and less will be spent on things that don’t. So, eventually, some of it might find its way back to your pocket because the economy picks up sooner rather than later.

More as it develops…