Obama to call for freeze on discretionary programs
By NECN
(NECN: Brian Burnell, Hartford, Conn.) - As President Obama prepares to address a joint session of Congress and the nation with his State of the Union speech tomorrow, there is already reaction to some of what the President will propose. Mr. Obama will call for a three-year freeze on discretionary federal spending. What does that mean? Spending on the military, veterans, homeland security and international affairs would be exempt. The freeze would cut the deficit by 250-billion dollars over 10 years. President Obama's Republican rival in the last election says we need to do it. Sen. John McCain, R-Arizona: I think its important and I'll support it. But the President's going to also have to promise to veto bills that are laden with pork-barrel spending. The trouble is one person's pork is another person's pet project. The President's proposal has both economic and political ramifications so who better to talk to about it than a politician who's also an economist? Demetrios Giannaros is a professor of economics at the University of Hartford's Barney School of Business. He is also a democratic member of the Connecticut House of Representatives. As to that "pork versus project" dilemma, he says some of the frozen money would have been spent on stimulus projects. Demetrios Giannaros, Ph.D., University of Hartford: What they must be projecting that the economy will be doing a little better next year than they had anticipated and maybe they can afford a little trimming. When you talk about saving 250-billion dollars over a 10-year period in relation to a 15-trillion dollar economy it's a small portion so the impact is going to be minor. He warns the government needs to be careful not to send a weak economy back into intensive care. Demetrios Giannaros, Ph.D., University of Hartford: If people push for the government to start trimming while we're still barely recovering we would revert back into another recession and that's not a good thing. In an interview with ABC's Diane Sawyer President Obama acknowledged this idea poses political risk but he says he is not thinking about that.
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