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  • Will President Obama Use the State of the Union Address to Go the Distance on Federal Spending?

    During last year’s State of the Union address, President Obama emphasized the need to restore fiscal responsibility in Washington. The federal government racked up a $1.3 trillion deficit in 2010, and the long-term fiscal outlook is even worse. While the average historical deficit stands at 2.9 percent of gross domestic product (GDP), by 2050, deficits will have surpassed 20 percent of GDP and will continue to climb.

    To tame the beast, Congress and the President will need to work together to reduce runaway spending, the main source of budget shortfalls. Several attempts are already underway to control discretionary spending: House leadership is in the midst of preparing a rescissions package worth $60 billion, and last week, the House Republican Study Committee unveiled a spending reduction plan that would result in $2.5 trillion in savings over the next decade.

    This is a good start, but to have a real impact, Congress must tackle entitlement spending on Medicare, Medicaid, and Social Security, which represent trillions in unfunded promises. In the year since the President’s last State of the Union address, increased attention has been given this issue. Representative Paul Ryan (R–WI) re-introduced his Roadmap for America’s Future, a plan to eliminate federal deficits and transform entitlement programs and the health care system at large. The President also created the 18-member, bipartisan National Commission on Fiscal Responsibility and Reform. The commission offered a plan to reduce the deficit in December, and though the proposal was flawed, it included several promising ideas to address the nation’s fiscal dilemma.

    Some members of the commission also offered alternative proposals. The Bipartisan Policy Center’s Debt Reduction Task Force, which was co-chaired by Alice Rivlin, a member of the commission, and former Senator Pete Domenici (R–NM), offered its own plan to reduce the deficit. And Rivlin and Ryan co-authored yet another plan to reform Medicare and Medicaid, reducing the programs’ unfunded promises and giving states and patients greater flexibility to make health care decisions.

    According to the White House, tonight President Obama will propose a budget freeze and an earmark ban to signal a commitment to deficit reduction. These are good ideas, but they are staggeringly small. If the President is serious about meaningful change, he should use tonight’s State of the Union Address to advance reform to put entitlement programs on stable footing. One example that has received support from both sides of the aisle is the deficit commission’s proposal to increase the solvency of Social Security by raising the retirement age and reducing benefits.

    According to Maya MacGuineas, president of the Committee for a Responsible Federal Budget, President Obama “has to go first and he has to be specific. He has to pivot to something hard.” The State of the Union address is the perfect chance for the President to build on the last year’s momentum to ensure that 2011 will bring the needed changes to reduce deficit spending.

    Posted in Economics [slideshow_deploy]

    8 Responses to Will President Obama Use the State of the Union Address to Go the Distance on Federal Spending?

    1. Kevin H, college par says:

      Where are the jobs?

      House Republicans promised in campaigns they would work from day 1 to create jobs – where are the jobs bills? All they are doing is working on symbolic bills that know will not advance into law – does symbolism create jobs?

      Americans are already fed up with their broken promises, the polls numbers are dropping by the day while Obama's keep rising. What a mess.

    2. Lee in SC says:

      President Obama would be wise to follow thru on these suggestions and I hope and pray he will, however, he must prove himself. Unfortunately, Obama will say whatever he needs to say. Follow thru on his promise is another matter of which he has proven in the past not to keep. I wish our country to listen to the people, but I am sorry, I do not think this will happen under this administration.

    3. Lloyd Scallan (New O says:

      Kevin H – The Republican have been in power for less that one month, yet you expect jobs to appear out of thin air after Obama's policies has cost million of jobs in the past 2 years as well as the Dems empowerment in the past 4. Already Repubs have kept more campagin promises by voting for the repeal of ObamaCare in the House than Obama has in the past 2 years. This vote is so much more than "symbolic" Not only does is set the tone for 2012, but it draws out those that hide in both the House and Senate to be recognized by the American people as those that want to save this nation we grew up in or those that share Obama's dream that it become a socialist state.

    4. Leon Lundquist, Dura says:

      Obama and the Demolition Plutocrats behind him will do everything in their considerable power to prevent Jobs from being created by and for the Loyal Opposition and everything to create pay offs for their pals in Labor and Academia. You know, Katheryn Nix, Obama is a Mass Liar and while we are all paying attention to 'civility' and 'bipartisanship,' behind closed doors Obama is running a Dictatorship. What do you think of a Petition Drive that empowers the House of Representatives to go after Unconstitutional Forms of Government?

      PETITION: WE the People, Sovereign Citizens hereby withdraw our support for Unlawful and not Constitutional Forms Of Government, specifically Police State, Socialist, Communist and Dictatorship. We call upon the United States House of Representatives to Investigate unlawful Forms of Government, to remove their funds and to prosecute their creators.

      WE declare our Representation has been usurped by Racketeering Influenced and Corrupt Organizations and WE demand that Treason, False Prosecution, Refraining Prosecution, Racketeering, Intimidation, Harassment, Perjury and Voter Fraud shall be enforced.

      WE Petition for Injunctive Relief from unlawful dictates of Federal Government Agencies, the House shall accept our Reports, accumulate them and redress our grievances. As Petitioners we renounce violence and reaffirm the Constitution as it was written, Justice is the answer to violence and Justice in the House of Representatives will prevent violent uprising in the United States of America.

      I'll bet even Glenn Beck would like this one: It is truly Empowerment!

    5. cinders2 says:

      This is what I heard in the SOTU speech . That he intends to continue spending . The entitlements need to be addressed . He mentioned them but not that he intends to really cut them or reform them .

      Right after the S.o.t.U speech the dems came out and started the mistruth about taking SS away from seniors. Please get the message out there that those over 54 won't be affected at all . It will be reformed for those younger then that . I get stuff in the mail almost weekly from dems trying to scare seniors . Get your message out there PLEASE !!!!!

      These hard things need to be done and done now .

      I hope republicans take the lead in doing the real reforms needed .

      Social Security, Medicare, Immigration , Tax codes (change to fair tax) get rid of dept of education and put it back into the states hands . Cut all depts across the board . There's a few just for starters .

    6. Bobbie says:

      Gives me goose bumps, Leon!

      With the simple fact, Obama does nothing in favor of this country's people as a whole, refuses his obligation to his constraints of the Constitution, talks a good talk but in actuality is a set-up for collapse, impeachment needs serious consideration.

    7. Tenis says:

      Comical that The President pressed for more rail service: Amtrak promised to add a third roundtrip train from Washington to Newport News on the Virginia Peninsula. A week ago, the Daily Press reported that there was $29 million in unspent interstate highway funds that were intended to build an on- and off-ramp to Newport News/Williamsburg International Airport. – Tenis

    8. Rugby Store says:

      Mr. Obama mentioned 100,000 troops returned from Iraq, but neglected to mention the 50,000 who remain. He mentioned how our civilians “will forge a lasting partnership with the Iraqi people,’’ but did not reveal that they can only move about the country in a military convoy. If, or when, we leave that devastated country, we will leave it with millions of unemployed, devastated people who cannot possibly contribute to their own security, let alone ours.

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