–President Urges Hill To Tackle Deficit, Work Together On Tax Reform
–Hill Dems Applaud President’s Focus On Investments; GOP Is Skeptical
–Congressional Republicans Say Obama Didn’t Focus On Deficit Cuts

By John Shaw

WASHINGTON (MNI) – Even as President Obama moved conspicuously to
the political center Tuesday evening in his State of the Union address,
the president’s legislative agenda continues to enjoy broad support
among congressional Democrats but provokes deep skepticism among
Republicans.

In his speech, Obama offered upbeat themes, saying the U.S. has
emerged from a traumatic recession.

“We are poised for progress. Two years after the worse recession
most of us have ever known, the stock market has come roaring back.
Corporate profits are up. the economy is growing again,” he said.

“This is our generation’s Sputnik moment,” he said.

The president blended a call for austerity with a plea for new
spending in education and infrastructure.

Obama recommended a five-year freeze in non-defense discretionary
spending, a step he said would save $400 billion.

He also urged Congress to work on both individual and corporate tax
reform.

House Budget Committee Chairman Paul Ryan, giving the official
Republican response, said the U.S. is “approaching a tipping point” on
fiscal matters.

“We face a crushing burden of debt. The debt will soon eclipse our
entire economy and grow to catastrophic levels in the years ahead,” Ryan
said.

Ryan also reiterated that Republicans will demand some spending
cuts before voting to approve an increase in the debt ceiling. “Endless
borrowing is not a strategy; spending cuts have to come first,” he said.

Sen. Jeff Sessions, the ranking Republican on the Budget Committee,
told Market News that Obama did not place enough focus on deficit
reduction in his remarks.

“This is the overwhelming problem the country faces and I didn’t
see any serious leadership from the president. There was no leadership
from the president on the deficit and we need presidential leadership to
attack the deficit,” Sessions said.

Sen. Rob Portman, a Republican who once served as President Bush’s
budget director, also told Market News International that the president
described the nation’s fiscal problems well but didn’t offer a
persuasive solution.

“He pointed out the problem pretty well, but he didn’t identify
the solutions very precisely,” Portman said.

Portman said that the president was right to mention the need for
Social Security reform, but then appeared to oppose most of the
suggested reforms of the program.

Senate Finance Committee Chairman Max Baucus praised the president
for focusing on tax reform, adding that his panel has been working on it
since last year.

House Ways and Means Committee Chairman Dave Camp said Obama should
have offered “more concrete plans” to spur economic growth.

He supported Obama’s call for tax reform, declaring that “tax
reform should address the entire tax code.”

** Market News International Washington Bureau: 202-371-2121 **

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