Addressing National Debt within the State of the Union
I am a full time student at the University of Miami pursuing a bachelor’s of Science degree majoring in Economics. During the annual State of the Union speech, the president shares the economic evaluation of this country, and he presents the plan that the administration wants to implement in order to reverse the economic downturn. I admit not to have been a keen follower of previous State of the Union speeches: The only existing memories bring me back to the dinner table with my family, a feast before our midst with President George Bush, Jr. on the television. I don’t remember what he spoke about back then. All I know is that the State of the Union speech provides a forum for the president to share his plans for the year with the citizens. At the end of the year, the presented strategies do not produce the promised results. My attention is drawn to the president’s speech on how he intends to handle the issue of cutting the national debt. As an economics student who is about to enter the job market, the economic downturn directly impacts my ability to find gainful employment.
The national debt has presented numerous challenges on the state of US economic growth including reduced jobs, an inability to sponsor government programs (Medicare, Medicaid, and Social Security) effectively, among other challenges. This matter, therefore, calls for a detailed, objective and skillful approach to ensure that the national debt gets addressed in order to stimulate positive economic growth.
The national debt proves to be a continued Presidential concern for several years. This concern is reflected in the fact that every President in the last two decades presented a plan to reduce the national debt in at least one of their State of the Union speeches. In his last State of the Union speech, Bill Clinton stated that he had a plan that would eliminate the nation’s 44 trillion dollar debt in one decade by cutting spending and making payments. President Clinton stated that this can be done without cutting Medicare. He stated, “Let me be clear: There will also be no new cuts in benefits for Medicare. As we move toward the 4th year, with the explosion in health care costs, as I said, projected to account for 50 percent of the growth of the deficit between now and the year 2000, there must be planned cuts in payments to providers, to doctors, to hospitals, to labs, as a way of controlling health care costs.” It has been more than a decade since Bill Clinton left office and, only $1.2 trillion of the national debt was settled. President Obama revisits the issue of reducing and finally settling the national debt.
On February 12th, 2013 President Obama delivered his State of the Union speech to a joint session of the 113th Congress at the Chamber House and millions Americans across the world. This speech outlined the president’s key priorities for the fiscal year. Concerning the national debt, Obama stated his commitment to reducing the US deficit and debt, but clearly stated that he could not do it at the expense of Social Security and Medicare.
The first part of his plan to reduce the deficit was to achieve savings on Medicare costs. The President stated, “On Medicare, I'm prepared to enact reforms that will achieve the same amount of health care savings by the beginning of the next decade as the reforms proposed by the bipartisan Simpson-Bowles commission”.
The second part of his plan would be to lower healthcare cost attributed to the healthcare reform initiatives. The President boasted that, “Already, the Affordable Care Act is helping to slow the growth of health care costs. We'll reduce taxpayer subsidies to prescription drug companies and ask more from the wealthiest seniors.”
The third savings will come from reforming the way the government reimburses medical providers for the services they perform. President Obama stated, “We'll bring down costs by changing the way our government pays for Medicare, because our medical bills shouldn't be based on the number of tests ordered or days spent in the hospital. They should be based on the quality of care that our seniors receive.”
In my opinion the president did not give the matter of national debt the consideration it deserves. In fact the President only used the word “debt” twice in his entire speech. His ideas fell short of substantive conviction that his plan would guarantee notable debt reduction. It is conventional wisdom that broad based economic growth calls for a balanced approach to deficit reduction with spending cuts and revenue with everyone contributing. When the President did mention government spending and the deficit, he only spewed boosted statistics trying to boast about his success. The President could have used at least a portion of his the State of the Union speech to address how he plans to cut spending. The savings accrued from healthcare reform is not adequate to offload the current debt. The quicker we reduce the national debt, the sooner we will begin to enjoying economic growth.