President Obama plans to announce a three-year freeze on discretionary, “non-security” spending in the lead-up Wednesday's State of the Union address, Hill Democratic sources familiar with the plan tell POLITICO.
The move, intended to blunt the populist backlash against Obama's $787 billion stimulus and an era of trillion-dollar deficits -- and to quell Democratic anxiety over last Tuesday's Massachusetts Senate election -- is projected to save $250 billion, the Democrats said.
The freeze would not apply to defense spending or spending on intelligence, homeland security or veterans.
The proposal is in line with a plan floated by Sen. Evan Bayh (D-Ind.), a fiscal hawk, who told Bloomberg's Al Hunt last week that there was a “fighting chance” Obama would propose a freeze in most discretionary spending by the federal government as part of his address.
“The president can say in this State of the Union address, ‘I’m going to include in my budget a freeze on discretionary spending, I’m drawing a line in the sand, and I’m going to use my veto pen to enforce that,’” Bayh said in an interview on Bloomberg Television’s Political Capital with Al Hunt.
The move would likely be welcomed by Blue Dog Democrats and deficit hawks, but party liberals would likely bridle at baselining a wide array of popular domestic spending programs.
The White House didn't respond to a request for comment.
On Monday, Obama unveiled a series of five proposals intended to help middle-class families, including a near-doubling of the Child and Dependent Care Tax Credit for families making under $85,000 a year, creating a system of automatic workplace IRA contributions, and expanding help for families with elderly relatives.
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