Federal Relations

January 26, 2010

President Obama to Propose Discretionary Spending Freeze

Late yesterday, the Obama administration announced an intention to propose a 3 year freeze of domestic discretionary spending -excluding defense/veterans and homeland security. The proposal, an attempt to decrease the federal budget deficit, will be outlined in the President’s State of the Union address this Wednesday night. At present, we know that the proposal would save approximately $250 billion (by 2020). If the president’s proposal succeeds, it could mean level funding for science and education accounts — important to the higher education community — for the remainder of his first term. However, administration officials have indicated a willingness to cut certain programs in order to allow for increases to programs of importance to the administration -such as education and health. President Obama will officially unveil his complete FY11 budget request on Monday February 1st. It remains to be seen whether or not Congress will go along with his proposed spending freeze. In recent years, Congress has balked at cuts or level funding of programs deemed important by the majority. However, the current political climate on Capitol Hill and fact that we find ourselves in an election year, could increase pressure on Congress for fiscal restraint.