Expert: Federal spending freeze beats alternative

sspires@macon.comFebruary 7, 2011 

A federal freeze on spending is preferable to the alternative for the vast segment of government workers in Middle Georgia, a Macon State College economist said Friday.

President Barack Obama proposed an across the board federal spending freeze for the next five years during his Jan. 25 State of the Union address to Congress.

“As bad as that may seem to some -- freezing spending across the board -- it’s not the alternative. That alternative is a deep cut in payrolls or just getting rid of jobs,” said Tripp Shinn, an economics professor who follows federal spending here, specifically for Robins Air Force Base. “That’s not being talked about, yet.”

Some 23,000 people work at Robins, mostly for the Warner Robins Air Logistics Center, making it the largest employer in the area.

Although, the White House has released few details about the proposed freeze, it would not affect what is known as entitlement, basically Social Security benefits, and Medicaid and Medicare payments. Some say the freeze would not affect the Pentagon, but Loren Thompson, a defense analyst with the Arlington, Va.-based Lexington Institute said Defense Secretary Robert Gates has already pledged to hold budget proposals to a 2010 level for the next five years.

“If that is the case, then in effect you would have a freeze. If inflation goes up, then that would mean less buying power and a dip in spending growth,” Thompson said. “But the current rate of spending is really untenable. The United States cannot continue to spend, especially on defense, the way it has been over the past decade.” In 2000, the defense budget was about $350 billion. After the Sept. 11, 2001 attacks and the subsequent wars in Afghanistan and Iraq, Thompson said, Pentagon “spending has swelled to more than $700 billion a year.”

To put the defense spending figures in perspective, Thompson said in 2000 the United States produced about one-third of the world’s goods -- known as gross domestic product -- while military spending was about 20 percent.

“Now we have slipped to 24 percent of domestic product and defense spending has ballooned to almost 50 percent, versus the rest of the world,” Thompson said. “That’s just not sustainable. What’s even crazier is that we borrow money to accomplish this, a lot from a nation many see as a future enemy -- China.”

Thompson pointed out that China holds some $1 trillion in U.S. debt.

A federal spending freeze would take about $80 million in yearly payroll growth out of Robins Air Force Base’s economic impact. Robins pays more than $1.2 billion a year in salary and benefits.

The freeze would also slow direct contract spending, which has grown by about $20 million a year over the past five years. In 2009, Robins paid out $282 million in various contracts across the state, with the bulk of those concentrated in Middle Georgia, according to official Robins figures.

The freeze would lower the U.S. deficit spending gap by $400 billion, Obama said during his State of the Union address.

U.S. Rep. Austin Scott, R-Ga., said after Obama’s speech that Congress would have a hand in crafting any spending freeze and the Department of Defense might not be affected.

“Certainly, with war in Afghanistan and Iraq, we will not be talking about deep cuts to Defense Department spending, but we in Congress are willing to work with the president in spending cuts,” Scott said.

To contact writer Shelby G. Spires, call 744-4494.

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