Last week President Obama announced the “Volcker Rule” proposing tough constraints on big banks. During the announcement Barney Frank stood behind the president on the podium in visual support of the policy. As noted in my last post, the Chairman of the House Financial Services Committee then proceeded directly to an interview on CNBC, the media outlet that is arguably the most direct conduit to the banking industry affected by that policy. In the interview Barney Frank soft pedaled the impact of the proposed policy, saying it would not go into effect for 3 – 5 years.
Yesterday, in a background briefing, the administration announced a three year spending freeze on portions of the budget. Since departments with the fastest growing government expenditures like Defense, VA, the State Department, and entitlements are excluded from the “freeze”, it will have a negligible effect on the ballooning deficit. NYT:
“The payoff in budget savings would be small relative to the deficit: The estimated $250 billion in savings over 10 years would be less than 3 percent of the roughly $9 trillion in additional deficits the government is expected to accumulate over that time.”
Shortly after the announcement, Jared Bernstein, economist and economic adviser to Vice President Biden, appeared on the Rachel Maddow Show – the media outlet that is arguably the most direct conduit to the progressive community. Mr. Bernstein proceeds to soft pedal even the very modest impact the policy would have on deficits, almost apologizing for it, and practically promising that the administration will really continue to be the big spenders that the progressives know and love. Maddow wasn’t buying what Jared was selling:
One cannot help but wonder if the administration is trying to be all things to all people, and risks representing nothing to no one.
I am sure the President will clear all of this up in the State of the Union address tomorrow.