Why Not Freeze Non-Security Spending?

A group of six Republican senators, led by John Sununu of New Hampshire, is suggesting Congress enact some form of freeze on federal spending as a means of offsetting relief and recovery costs for the Gulf Coast hurricanes (see chart below).

When surveyed by Human Events, however, leading congressional Democrats either flatly opposed a freeze on non-security spending, or evaded answering the question.

Not surprisingly, House Minority Leader Nancy Pelosi (D.-Calif.) used the question to suggest borrowing more money and raising taxes.

“It is very important for our leadership to hear this message and to be willing to use their power to help enact reductions in spending,” Sununu said at a September 22 press conference. He was joined by Senators Tom Coburn (R.-Okla.), Jim DeMint (R.-S.C.), John Ensign (R.-Nev.), Lindsey Graham (R-S.C.) and John McCain (R.-Ariz.).

Human Events asked congressional Democrats whether they would support a freeze on non-Defense, non-Homeland Security spending.

There’s a proposal being put together that will freeze non-Defense, non-Homeland Security discretionary spending. Would you support that?

Rep. Nancy Pelosi (D.-Calif.): No.

No? OK, are there any offsets that they’re thinking about, or what is the plan coming into action for you to offset Katrina spending?

Pelosi: What I have proposed is a regional authority, which would give local discretion to how to go forward to rebuild. And it would have credit, which would be guaranteed by the federal government and be funded by a 50-year long-term bond. This is too expensive, because many of the things they want to take money out of are things that we need. We need to educate our children. We need to have Medicaid for our poor kids. We need to have job creation and the rest. So, you can’t cut what is actually part of the solution. Now, if they want to put everything on the table: tax cuts for the wealthiest, the estate tax, defense spending, the war in Iraq, discretionary domestic spending. Then, you put it all on the table, go into a meeting and say, “What are our priorities? What is deferrable, what is not?” In terms of the huge spending that will be necessary to rebuild, we are talking in a different vein and that is a long-term bond, giving credit to these areas guaranteed by the federal government in order to make the decisions to rebuild housing and schools and businesses and infrastructure. . . .

So, would repealing the tax cut, would that be what pays for your bond? Or would that just be all government backed?

Pelosi: You have to do that—those things have to be done in order to reduce the deficit. Even before Katrina came along, those tax cuts were a bad idea because they increase the deficit.

There is a proposal to freeze discretionary spending for non-Homeland Security and non-Defense funds. Is that something you would consider?

Rep. Steny Hoyer (D-.Md.): Freeze at last year’s levels?

Yes, there are options to adjust for inflation, or not, that include Defense, that don’t include Defense. Is that something you would consider instead of the offset package the RSC [Republican Study Committee] proposed?

Hoyer: I’d want to see it. You say would I consider—I’d look at anything that’s put on the table. I may well reject it out of hand, but we’ll consider it.

Let’s say the one that freezes discretionary spending outside of Homeland Security and Defense spending. Over five years, it’s going to save about $600 billion. That’s what is proposed by Coburn and McCain.

Hoyer: McCain?


Hoyer: I haven’t seen it. I want to talk to [Rep. John] Spratt [ranking Democrat on the House Budget Committee] about it, but my gut reaction is that if it freezes all domestic discretionary spending it does exactly what we said on this paper [briefing reporters about GOP budget cuts]. Because some of that discretionary spending is discretionary spending specifically aimed at helping people with housing, nutrition and education, which all these folks are going to need. So, on the one hand to give the emergency aid and on the other hand to cut, it’s giving on one end and taking from the other.

To finance Katrina spending there is a suggestion to freeze non-Defense, non-Homeland Security discretionary spending. Is that something that would be approachable for you?

Sen. Debbie Stabenow (D.-Mich.): We have to look at all of this. I want to make sure that first of all we are putting on as much cost savings under the Medicare prescription drug plan as possible through purchasing. We know we could save $300 or $400 billion by doing that. We need to be taking those actions first rather than cutting public services for people. … And we have look both the revenue and the spending. To say to those who are the most blessed in our country, the wealthiest among us that we will add another $70 billion tax cut while cutting education for our children or cutting science exploration or healthcare or job training I don’t think reflect the right kinds of values.

There is a proposal to freeze discretionary spending for non-Homeland Security and non-Defense funds. Is that something you would consider?

Rep. James Clyburn (R.-S.C.): Absolutely not. Freezes across the board are unfair and dishonest. That’s why we need an independent commission to look at this. Too many times across-the-board freezes lead to more under-funding, and in places like New Orleans, who are historically under-funded and ignored, we need discussion to look at when and where we should be doing things.

Sen. Coburn has suggested freezing discretionary non-Defense, non-Homeland Security spending to finance Katrina. Is that something you would potentially vote for?

Sen. Richard Durbin (D.-Ill.): I’d have to look at that carefully, but I want to tell you that it is interesting to me, and this is no reflection on Sen. Coburn, how many on the Republican side are so determined to find offsets in spending before they will put any money into rebuilding America after the hurricanes. I didn’t hear a single voice on the Republican side make that argument when we were talking about $18 billion to rebuild Iraq. So, these deficit hawks have started to fly here over America. Where were they during that debate on Iraq?

Putting $817 Billion in the Freezer
Sen. John Sununu and five other Republican senators have suggested four variations on a federal spending freeze that could save between $380.5 billion and $817.3 billion over five years.
Source: CBO, Social Security Administration, staff calculations





Allow non-Defense, non-Homeland Security discretionary spending to grow by 3.4% each year, the same average annual rate of growth between 1995 and 2000.

$21.8 B

$67.8 B

$380.5 B

Allow non-Defense, non-Homeland Security discretionary spending to grow with inflation.

$26.7 B

$81.2 B

$436.5 B

Freeze non-Defense, non-Homeland Security spending.

$36.2 B

$111.6 B

$607.4 B

Freeze discretionary spending.

$47.9 B

$149.1 B

$817.3 B