Obama pitches partial spending freeze

President Barack Obama will ask the U.S. Congress to freeze spending on some domestic programs for three years beginning in 2011, administration officials say.

The spending freeze, to be proposed in Obama'sstate of the union address Wednesday night,would apply toso-called discretionary spendingin the U.S. budget, a relatively small portionof overall federal spendingmade available for domestic agencies whose budgets are approved by Congress each year.

Discretionary spending made up $477 billion US of Washington's $3.5-trillion total budget last year.

Some agencies could actually get increases, while others wouldface cuts. Overall, the affected programs saw an almost 10 per cent increase this year. In 2010 alone, the U.S. budget deficit is forecast to hit $1.3 trillion.

The Pentagon, veterans programs, foreign aid and the Homeland Security Department would be exempt from the freeze, as they do not fall under the umbrella of discretionary spending.

Small change

The savings would be small at first, perhaps $10 billion to $15 billion, one official said. But over the coming decade, savings could add up to $250 billion.

The White House is underpressure to cut deficits, or at least keep them from growing. Encouraged by last week's Massachusetts Senate victory, Republicans are hitting hard on the issue, and polls show voters increasingly concerned.

Critics on the left are attacking thepresident for trying to hold down spending whiletheeconomy is still reeling, butcritics on the right say the belt-tightening doesn't go far enough.

The Senate loss appears to have spurred Obama to adopt a populist tone of job creation, lower taxes, and hammeringat lavish compensation packages on Wall Street.

He has pushed the financial industry to show more restraint in its pay practices, and earlier this month pitched a plan that would limit the size of Wall Street banks and restrict the risks they are allowed to take.

Economic issues are expected to dominate the state of the union address.