The Annotated 2013 State of the Union

Now we need to finish the job.  And the question is, how?

In 2011, Congress passed a law saying that if both parties couldn't agree on a plan to reach our deficit goal, about a trillion dollars' worth of budget cuts would automatically go into effect this year.  These sudden, harsh, arbitrary cuts would jeopardize our military readiness.  They'd devastate priorities like education, energy, and medical research. They would certainly slow our recovery, and cost us hundreds of thousands of jobs.  That's why Democrats, Republicans, business leaders, and economists have already said that these cuts, known here in Washington as "the sequester,"[p] are a really bad idea.  

Now, some in this Congress have proposed preventing only the defense cuts by making even bigger cuts to things like education and job training; Medicare and Social Security benefits.  

That idea is even worse[q].  Yes, the biggest driver of our long-term debt is the rising cost of health care for an aging population.  And those of us who care deeply about programs like Medicare must embrace the need for modest reforms [r]- otherwise, our retirement programs will crowd out the investments we need for our children, and jeopardize the promise of a secure retirement for future generations.  

But we can't ask senior citizens and working families to shoulder the entire burden of deficit reduction while asking nothing more from the wealthiest and most powerful.  We won't grow the middle class [s]simply by shifting the cost of health care or college onto families that are already struggling, or by forcing communities to lay off more teachers, cops, and firefighters.  Most Americans - Democrats, Republicans, and Independents - understand that we can't just cut our way to prosperity[t].  They know that broad-based economic growth requires a balanced approach to deficit reduction, with spending cuts and revenue, and with everybody doing their fair share[u].   And that's the approach I offer tonight.  

On Medicare, I'm prepared to enact reforms that will achieve the same amount of health care savings[v] by the beginning of the next decade as the reforms proposed by the bipartisan Simpson-Bowles commission. Already, the Affordable Care Act is helping to slow the growth of health care costs.  The reforms I'm proposing go even further.  We'll reduce taxpayer subsidies to prescription drug companies and ask more from the wealthiest seniors[w].  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.  And I am open to additional reforms from both parties, so long as they don't violate the guarantee of a secure retirement.  Our government shouldn't make promises we cannot keep - but we must keep the promises we've already made[x].  

To hit the rest of our deficit reduction target, we should do what leaders in both parties have already suggested, and save hundreds of billions of dollars by getting rid of tax loopholes and deductions for the well-off and well-connected.  After all, why would we choose to make deeper cuts to education and Medicare just to protect special interest tax breaks?  How is that fair?  How does that promote growth?

Now is our best chance for bipartisan, comprehensive tax reform that encourages job creation and helps bring down the deficit[y].  A The American people deserve a tax code that helps small businesses spend less time filling out complicated forms, and more time expanding and hiring; a tax code that ensures billionaires with high-powered accountants can't pay a lower rate than their hard-working secretaries[z]; a tax code that lowers incentives to move jobs overseas, and lowers tax rates for businesses and manufacturers that create jobs right here in America.  That's what tax reform can deliver.  That's what we can do together.[aa]

I realize that tax reform and entitlement reform won't be easy.  The politics will be hard for both sides.  None of us will get 100 percent of what we want[ab].  But the alternative will cost us jobs, hurt our economy, and visit hardship on millions of hardworking Americans.  So let's set party interests aside, and work to pass a budget that replaces reckless cuts with smart savings and wise investments in our future.  And let's do it without the brinksmanship that stresses consumers and scares off investors.  Bhe greatest nation on Earth cannot keep conducting its business by drifting from one manufactured crisis to the next.  [ac]Wet's agree, right here, right now, to keep the people's government open, pay our bills on time, and always uphold the full faith and credit of the United States of America[ad].  The American people have worked too hard, for too long, rebuilding from one crisis to see their elected officials cause another.

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James Fallows is a national correspondent for The Atlantic and has written for the magazine since the late 1970s. He has reported extensively from outside the United States and once worked as President Carter's chief speechwriter. His latest book is China Airborne. More

James Fallows is based in Washington as a national correspondent for The Atlantic. He has worked for the magazine for nearly 30 years and in that time has also lived in Seattle, Berkeley, Austin, Tokyo, Kuala Lumpur, Shanghai, and Beijing. He was raised in Redlands, California, received his undergraduate degree in American history and literature from Harvard, and received a graduate degree in economics from Oxford as a Rhodes scholar. In addition to working for The Atlantic, he has spent two years as chief White House speechwriter for Jimmy Carter, two years as the editor of US News & World Report, and six months as a program designer at Microsoft. He is an instrument-rated private pilot. He is also now the chair in U.S. media at the U.S. Studies Centre at the University of Sydney, in Australia.

Fallows has been a finalist for the National Magazine Award five times and has won once; he has also won the American Book Award for nonfiction and a N.Y. Emmy award for the documentary series Doing Business in China. He was the founding chairman of the New America Foundation. His recent books Blind Into Baghdad (2006) and Postcards From Tomorrow Square (2009) are based on his writings for The Atlantic. His latest book is China Airborne. He is married to Deborah Fallows, author of the recent book Dreaming in Chinese. They have two married sons.

Fallows welcomes and frequently quotes from reader mail sent via the "Email" button below. Unless you specify otherwise, we consider any incoming mail available for possible quotation -- but not with the sender's real name unless you explicitly state that it may be used. If you are wondering why Fallows does not use a "Comments" field below his posts, please see previous explanations here and here.
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