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Obama to propose freeze on government spending

Late Monday, Republicans mocked the idea of a Democratic spending freeze. "Given Washington Democrats' unprecedented spending binge, this is like announcing you're going on a diet after winning a pie-eating contest," said Michael Steel, spokesman for House Minority Leader John A. Boehner (R-Ohio).

Democrats, meanwhile, are likely to give the freeze a mixed response. Conservatives, including Sen. Evan Bayh (Ind.) and members of the House Blue Dog Coalition, have been calling for a freeze backed by the threat of a presidential veto. But liberals have resisted freezing spending, particularly on social programs, and are likely to call on Obama to extend any freeze to military programs, aides said.

As a candidate, Obama criticized a spending freeze proposed by his GOP opponent, Sen. John McCain of Arizona, comparing it to "using a hatchet to cut the fed budget. I want to use a scalpel."

Senate Budget Chairman Kent Conrad (D-N.D.), a strong proponent of balanced budgets who would have to sell the notion of a freeze to his colleagues, said Obama's proposal is "entirely possible to do." The results of a freeze would be "relatively modest in terms of overall deficit reduction," Conrad said. "But it sends an important signal that everything is on the table."

Discretionary spending -- which unlike entitlement spending is approved annually by Congress -- has risen rapidly over the past decade, by about 7.5 percent a year, according to the bipartisan Committee for a Responsible Federal Budget. The most recent spending bills, approved in December, authorized a 4.1 percent increase in total discretionary spending for the fiscal year that began in October and an 8.2 percent increase for federal agencies unrelated to defense.

It was not clear Monday which programs would be most affected by a freeze. Administration officials said Obama would not freeze spending across the board but would increase investments in some agencies while slashing others. For example, Democrats are eager to offer additional help to a struggling middle class.

Administration officials have said that goal would not conflict with deficit-reduction efforts. But the tension between them was on display Monday as Obama rolled out a list of relatively inexpensive initiatives to help middle-class families. Most of them were included in the budget he sent to Congress last year but were never funded, according to Democratic congressional aides.

They include nearly doubling the child- and dependent-care tax credit for families making less than $85,000 a year; limiting a student's federal loan payments to 10 percent of income above his basic living allowance; creating a system of automatic workplace retirement savings accounts; expanding tax credits to match retirement savings; and expanding elder-care help for the "sandwich generation" of baby boomers caring for parents as well as children.

"We're going to keep fighting to rebuild our economy so that hard work is once again rewarded, wages and incomes are once again rising, and the middle class is once again growing," Obama said in unveiling the list at the Eisenhower Executive Office Building. "Above all, we're going to keep fighting to renew the American dream and keep it alive -- not just in our time, but for all time."

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