Analyst view: Obama to seek 3-year freeze on domestic spending

(Reuters) - President Barack Obama, under pressure from deficit hawks, will seek a three-year freeze on domestic spending in his 2011 budget that would save $250 billion by 2020, administration officials said on Monday.

Obama will outline the spending hold-down in his State of the Union address on Wednesday and will spell it out in detail on February 1, when he unveils his second budget.

Here are some analysts'' views from Asia-Pacific on his proposal:

SELENA LING, HEAD OF TREASURY RESEARCH, OVERSEA-CHINESE

BANKING CORP, SINGAPORE

"At the end of the day, people would like to see discretionary spending cut back but it''s a bit vague.

"There are other parts of the mechanism that are also moving -- the healthcare reform bill he''s trying to push through, the $80 billion stimulus package that is meant to create jobs -- so you have to see how they work together."

DONG TAO, CHIEF ECONOMIST FOR NON-JAPAN ASIA AT CREDIT

SUISSE, HONG KONG:

"Most of the U.S. government spending is not exactly where Asia''s exports are heading to. So the relative impact to Asia''s exports will not be as big as if the U.S. consumers decide not to spend.

"I do think Asia will be able to manage high end of single- digit of export growth. This (plan) may have a little bit of an impact but probably it is below 2 percentage points. I would be much more worried if the U.S. consumers said they were going to freeze spending instead of Uncle Sam."

YUJI SAITO, DIRECTOR FOR FX DEPARTMENT, CALYON, TOKYO

"The U.S. needs to show a roadmap of how it will reduce the budget deficit at some point. Otherwise, from the point of view of budget discipline, a negative rise in longer-term Treasury yields could lead to a sell-off in the dollar and U.S. shares.