Think tank, union give tepid support for budget freeze

Key allies of the Obama administration on Tuesday gave conditional
support to the president’s proposed spending freeze, saying it must be
part of a broader effort.

John Podesta, president and CEO of the left-leaning Center for American Progress; Andy Stern, president of the Service Employees International Union (SEIU); and Anna Burger, SEIU’s secretary-treasurer, said President Barack Obama’s idea of a three-year spending freeze on most discretionary spending would help revive the economy and bring down the deficit only if Congress also passes healthcare reform and a jobs bill.

{mosads}But when pressed at a discussion on American workers at the Center for American Progress, the three liberal leaders would not commit to endorsing Obama’s spending freeze without the other measures, saying they wanted to learn more details about the proposal.

Obama is expected to announce the freeze formally during his first State of the Union address on Wednesday.

“You need to do a combination of things, including passing healthcare, which is the biggest contributor to the long-term deficit and debt outlook,” Podesta said.

Podesta, who led the Obama White House transition team, remains an outside adviser to the administration. Further, his think tank has supplied many of the senior aides in the administration.

Podesta cited his own work as chief of staff to President Bill Clinton, such as capping discretionary spending and using a pay-go statute, as helping bring the deficit under control in the 1990s. He said he sees some merit in cutting wasteful government programs while boosting more effective federal initiatives but that stopping discretionary funds cannot be the only measure to control the deficit.

“In my own view, if you just isolate one element of the budget, you can’t get the job done,” Podesta said.

Burger interprets the timing of the spending freeze talk — leaked two days before Obama’s speech Wednesday — as a signal that the administration will make a final push to unhinge stalled healthcare reform legislation. That bill was sidetracked last week after Democrats’ recent loss in the Massachusetts special Senate election, and with it their filibuster-proof majority.

“I think the fact that they are talking about doing this in the future literally is a clue that they are going to pass healthcare,” Burger said.

Later, speaking to reporters after the event, Stern said halting government spending alone is not enough to bring down the deficit.

“In and out of itself, it is not going to solve the problem. The question is, [Is] it part of something that is bigger?” Stern said.

The union leader said the spending freeze must be coupled with healthcare reform legislation and a jobs bill in order to bring down the national debt.

“I think if we pass healthcare, we get the jobs program, we start putting people back to work and the economy turns as we hope it will in 2011, this is not a huge issue as part of a whole fiscal discipline program in 2011,” Stern said.

“If this is what we think will provide fiscal discipline, I don’t think we get the nature of what needs to be done right now this year to get people back to work. The only way to solve the deficit is to have more people working.”

Though not explicitly endorsing the spending freeze, the comments from Burger, Podesta and Stern were not as harsh as those of several other prominent liberal voices that have dismissed the idea.

{mosads}Reacting with disbelief, Rachel Maddow of MSNBC and The New York Times’s Paul Krugman have both said it will severely hamper the fragile economy. In addition, House Democrats on key budget and appropriations committees are skittish about cutting spending during a recession.

The freeze would cover about one-sixth of the federal budget, exempting expenditures on defense, homeland security spending and entitlement programs. It’s projected to save the government about $250 billion over 10 years.

On Tuesday, Stern and others held back on direct criticism of the administration but continued to push for healthcare reform. The union leader said Obama should tout the bill as a job-creator in his State of the Union speech since it would lead to more hiring by hospitals and other healthcare service companies.

“He has to emphasize that this is a jobs bill, this is a deficit reduction bill,” Stern said.

Both Stern and Burger saved their most biting words for the Senate, which they felt squandered the rare 60-seat majority by stalling the healthcare legislation last year. They said the Massachusetts special-election loss should serve as a wakeup call to Senate Democrats — they need to move on bills in order to win over voters for the 2010 elections.

In addition, Stern repeated his call that the House pass the Senate version of the healthcare bill and secure assurances that the upper chamber will fix the legislation via reconciliation later on.

“It seems to me the only way forward,” Stern said.