Posts Tagged ‘budget deficit’
“The challenges we face are bigger than party. They’re bigger than politics,” President Barack Obama stated in his opening remarks of his third State of the Union address, emphasizing the lessons taken from the tragic shooting that took place in Tucson and applying them to a more bipartisan approach in confronting global economic challenges.
Throughout the duration of his lackluster speech, President Obama stressed the need to “out-innovate and out-educate” the rest of the world in “our generation’s Sputnik moment.” He highlighted his goal of ensuring that 80 percent of America’s electricity comes from “clean energy” sources by 2035 through greater advancements in research and technology funded by penalties against oil companies. He also outlined his plan to replace No Child Left Behind with his Race to the Top initiative in holding school teachers more accountable; elaborated on the competition we’re facing from countries such as India, China and South Korea, particularly in areas such as technology and education; and briefly mentioned the “need to take on illegal immigration” while hinting at his support of the Dream Act.
Perhaps the most interesting excerpts of his speech, in my opinion, were those that focused on the need to address “our mountain of debt” and to reduce our deficit by “cutting excessive spending.” In addressing these matters, he proposed a five-year domestic spending freeze and asking “millionaires to give up their tax cuts.” As he put it, “It’s not about punishing success, it’s about promoting success.” Yet, I can’t resist asking how revoking tax cuts from those who are most likely job-creators will “promote success” in the long run when such a proposal could hamstring a “millionaire” business owner from growing his company and hiring more workers – and “promoting success” among the newly-hired employees… You can either spend, say, $5 million worth of tax cuts on unemployment compensation or just give it to a business and enable it to use that money in providing paychecks and benefits to formerly unemployed employees.
Congressman Paul Ryan of Wisconsin delivered the Republican rebuttal to the president’s State of the Union address, and he focused almost exclusively on the federal budget deficit and current spending levels. He argued that instead of “restoring the fundamentals of economic growth,” the president went on a “spending spree” by increasing federal spending by 84 percent when factoring in the $787 billion stimulus package. Congressman Ryan also pointed out that the president added another $3 trillion to the federal deficit, particularly through the creation of a “healthcare entitlement.” If the current levels of spending and borrowing remain unchecked, he indicated that America’s “day of reckoning” will come as it already has to places such as Greece and Ireland – two nations on the verge of a catastrophic economic meltdown as a result of excessive spending on entitlement programs.
In spite of their disagreement over the best policy options, both leaders recognized that the U.S. is facing a serious “fiscal crisis” that requires an immediate, bipartisan solution. Yet, while President Obama painted a rather optimistic, yet unrealistic, picture illustrating his vision for “winning the future” in America, Congressman Ryan delivered the harsh, realistic truth: America is on the verge of collapse if we don’t get our spending – particularly on entitlement programs – under control. It’s a monumental challenge that’s “above politics” despite the partisan rhetoric of today’s New York Times editorial pages and the mixed reviews published in The Washington Post. I must commend Robert Samuelson on his well-written piece, “How Obama’s speech muddied the budget debate,” in which he declares that we won’t “win the future… by deluding ourselves.” I’m sure Greece and Ireland can attest to that.