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John Schoen grades Obama's economic plan in State of the Union

TODAY Money expert and msnbc.com senior writer John Schoen chatted live with TODAYshow.com readers on Monday afternoon about economic implications of the proposals in President Barack Obama's State of the Union speech.

Here are two of his answers and a complete archive.

Question from Tracy Bichl:
How do you think President Obama scores on his plans to reduce the deficit as stated in his State of the Union speech?

Answer from John:
I’d give him a “Gentleman’s C.” It’s all well and good to promise to freeze “discretionary” spending. But that dodges most of the problem. If you take Social Security, Medicare, defense and interest on the debt off the table, you’re only looking at about 16 cents of every federal spending dollar. Without serious reform of the big entitlements – or higher taxes – it’s pretty much impossible tp balance the federal budget.

Question from Melisa:
Does President plan to address the fiscal element to the Healthcare Reform Bill? This Law will have the largest impact on our day to day lives and it is the Most fiscally irresponsible.

Answer from John:
One of the main reasons for tackling health care reform was the need to slow the growth of health care spending. I don’t think that’s fiscally irresponsible. Critics of the plan argue that the projections of the law’s impact have been irresponsible because of the way they account for costs and savings. I agree with that, but it’s nothing new. Government accounting and budget projections are notoriously screwy.

What Obama seemed to be saying is that he wants to fix the problems that have been identified with the law instead of scrapping it and starting over. Given the urgency of cutting the growth of health spending, it doesn’t make sense to me to go back to square one. The law will likely continue to change in the coming years. But we can’t afford to do nothing.

Complete archive:


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