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Political Bargaining: The Budget "Freeze" Gambit

Ezra Klein writes:

The president call[ed] for a five-year non-security discretionary spending freeze tonight. [. . .] The Obama administration's proposal is better than [the GOP alternatives], to be sure. But it also feels more like the policy you'd get at the end of a compromise process, not the beginning.

This goes to the Obama administration's theory of negotiating more generally: Do you start with a reasonable compromise? Or do you end with a reasonable compromise? [. . .] The usual liberal critique of this approach is that starting with a reasonable compromise just means you end with a less-reasonable compromise, and the Obama administration would be better off rejecting calls for across-the-board cuts or freezes and trying to persuade Americans that the Republican approach here is wrong, and tax cuts for the wealthy are a much bigger contributor to the deficit than spending on food safety (which is true, incidentally). They might not win that fight, but maybe they'd end up with a three-year spending freeze rather than a five-year spending freeze.

As regular readers know, I'm generally sympathetic with this critique. I think it is misplaced here. Why? Because a "budget freeze" is pretty meaningless jibberish. Freeze what exactly? I'm sure Obama can come up with a good budget at 2010 spending levels that will have no chance of passage. And then folks will forget the freeze proposal entirely. After all, who remembers Obama's freeze proposal from last year? In the context of this particular budget negotiation, this is more "school uniforms" than the 2009 stimulus negotiation bungled by the Obama Administration. More . . .

As a critique of the general messaging of the proposal, the critique has more resonance. But the reality is after The Deal, that ship has sort of sailed for the time being. Maybe in a second term Obama can take another swing at this, but by and large, the "bargaining," such as it is, on general messaging on the deficit has been lost by Obama and the Dems. there won't be a do over on that one until after 2012.

Speaking for me only

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  • Display: Sort:
    What worries me is that this will be like (5.00 / 1) (#1)
    by Anne on Wed Jan 26, 2011 at 10:54:10 AM EST
    every other issue Obama and the Dems have taken on in the last two years - it will be all about getting "something" done, and it won't matter to them how bad the policy is, how potentially damaging it is to the jobs and employment picture, how many people it hurts, as long as they can take credit for being "serious" about the deficit.

    When a commentator on Marketplace (5.00 / 1) (#4)
    by oculus on Wed Jan 26, 2011 at 11:24:14 AM EST
    yesterday blamed the federal deficit on the stimulus, I thought, that is so wrong!

    Freeze what exactly, you ask? (none / 0) (#2)
    by sj on Wed Jan 26, 2011 at 11:13:44 AM EST
    Federal employee salaries, of course.

    That ship sailed (none / 0) (#3)
    by Big Tent Democrat on Wed Jan 26, 2011 at 11:14:44 AM EST
    I mean the "freeze" proposed in the SOTU.

    Parent
    That's also what I meant (5.00 / 2) (#7)
    by sj on Wed Jan 26, 2011 at 11:32:55 AM EST
    with my tongue only slightly in my cheek.

    In my personal experience at a corporate level, when a "spending freeze" has been implemented, it has always meant employee salaries.  And a moratorium on new hires -- even for attrition.  In general, rank and file employees understand this pretty well.

    Oddly, executive bonuses have rarely been affected.

    Obama speaks fairly fluent Corporate.

    Parent

    The "budget battle" (none / 0) (#8)
    by christinep on Wed Jan 26, 2011 at 03:22:50 PM EST
    that occurs in each Agency about program allocation dollars occurs down-the-road. While "freezes" typically translate to hiring freezes/partial freezes combined with attrition approaches, it also gets down to real program elements in the government. That is why the President's statement about "reorganizing" the government may well be read as more than an off-the-cuff salmon story. There can be lots of benefits to a comprehensive reorg, not the least of which are $$ and time-saving merger-type actions, abolition of certain positions (And--yes--that does include the delayering reality of looking at high/higher level Schedule Cs as well as cutting costly duplication.) A "freeze" of this extensive nature gives impetus to needed reorganization.

    Parent
    Need to add (5.00 / 1) (#9)
    by christinep on Wed Jan 26, 2011 at 03:27:25 PM EST
    The government-wide freeze does not require additional legislative action. It is the Executive's (President's) decision. For example: A famous (or infamous) "freeze" took effect at 12:01pm on January 20, 1981...the effective time coincided with the swearing-in of Ronald Reagan. (I remember the date well on that one, because we had just hired a person we needed to have sworn in before noon in order to beat the freeze. He is still at the Agency; and, we still chuckle about it.  Ah, memory lane....)

    Parent
    Freeze anything the Republican- (none / 0) (#5)
    by jeffinalabama on Wed Jan 26, 2011 at 11:24:37 AM EST
    controlled house wants to freeze... since that's where the substance wil come from.

    the president can propose anything in the budget, but the House can change anything it wants to. the Senate? they're so collegial that who knows how strong a 'minority' of 50+ democrats and fellow travellers would fight for issues.

    Meh, the no-plan plan. Let's see what the budget actually says.

    Negotiation with congress doesn't work well froma position of weakness, and I think much of these budget issues are starting from the position that maybe those republicans that want to cut more from certain areas won't if we begin by cutting it ourselves.

    Parent

    was watching FOX this morning (none / 0) (#6)
    by Capt Howdy on Wed Jan 26, 2011 at 11:25:00 AM EST
    to make sure no real punditry effected my thoughts on the speech and Newt had what I assume will be the rights response to this.

    it was not good.

    Parent

    the freeze is so gimmicky (none / 0) (#10)
    by ruffian on Wed Jan 26, 2011 at 03:34:06 PM EST
    It applies to 15% of the budget, I think he said last night.

    Maybe some people are impressed by the words Budget Freeze. They are undoubtedly poll tested.

    As far as bargaining, not much more to say on that. The administration thinks they get points from someone for starting with the reasonable compromise. They might if they then pointed out how unreasonable the other side is being. But they don't - they go ahead and compromise with them some more.

    I think you should be more worried about (none / 0) (#11)
    by Bornagaindem on Wed Jan 26, 2011 at 03:52:48 PM EST
    his saying he is going to revamp the tax code. With Obama in charge of that you can guarantee the middle class loses big - real big.

    Yes - I was going to bring that up (none / 0) (#12)
    by ruffian on Wed Jan 26, 2011 at 04:09:38 PM EST
    in the other thread as a bargaining example.

    He wants to cut the business tax rates in exchange for closing the loopholes. Geithner had a huge smile on his face when Obama got applause for that. The aim appears to make it revenue neutral, but I doubt that will happen. Business will most likely get the rate cuts, plus keep most of their favorite loopholes, or find ways to make new ones.

    If all of that is done in conjunction with raising the rates on the upper 2% of income-earners (ie revoking the Bush tax cuts, maybe it is a 'Deal' I can live with.

    Parent

    Size of budget not the problem (none / 0) (#13)
    by pluege2 on Wed Jan 26, 2011 at 08:23:56 PM EST
    Never has been.

    The problem has always been what is purchased with the money the government has: useless military hardware and imperialistic foreign adventures, or infrastructure and social safety net. Half the military expenditure would be many times more than necessary to keep the nation safe. If the savings were spent on strengthening the nation with infrastructure improvements, research, education, and social safety net, the nation would prosper beyond anyone's wildest dreams.