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

Kathryn Nix / January 25, 2011

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. (more…)