Previewing the State of the Union
At 9:00 PM E.T. tonight, President Obama will deliver his State of the Union address to Congress. With many fiscal issues left to be resolved in the coming months, we expect the budget and a discussion about debt to be a key part of his speech.
In just a little over two weeks, the across-the-board cuts in sequestration are due to go into effect on March 1. Lawmakers need to take advantage of the opportunity the sequester was originally designed for -- incentivizing a deal -- and agree to a fiscal plan that puts our debt on a sustainable path. Not long after that deadline, the continuing resolution for FY 2013 will expire on March 27, which could trigger a government shutdown if not resolved.
A comprehensive budget plan with reforms to both entitlement programs and the tax code could generate the savings needed to reach our goal of putting debt on a downward path as a share of the economy. These changes should be phased in gradually to protect the economic recovery and focus on the policies most likely to promote growth now and in the future.
Enacting a comprehensive plan will require leadership and compromise from both Democrats and Republicans. We hope President Obama's speech tonight will offer the leadership and willingness to make the tough decisions to achieve such a bipartisan deal that will address our debt. Check back tomorrow as we react to the speech here on The Bottom Line.