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David M. Walker

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The State of the Union Is Not Strong

Posted: 01/23/2012 3:33 pm

Three billion dollars. No matter who you are, that's a hefty sum of money. And that's how much more in debt our nation gets every day. That's right, every day, including weekends and holidays!

There are many things President Obama must cover tomorrow night in his State of the Union address. The state of the economy and employment levels, national security and foreign policy issues, and a variety of other issues that contribute to the overall picture of our nation's well being.

But our nation's finances are in such dire straits that they are reaching a critical condition and must be addressed. The truth is, with our deteriorating financial condition, high unemployment, political stalemate in Washington, and declining public trust and confidence, the state of our union is not strong.

In his upcoming State of the Union address, President Obama needs to be candid about the true state of our nation and the challenges that we face. There are five critical things regarding our nation's finances that I hope we will hear him say.

1. First, the president should acknowledge that the financial state of our nation is NOT good and it hasn't been for several years now, including in the final years of President George W. Bush's presidency. To be blunt, the facts don't support any claim otherwise. At the end of the last fiscal year, our total federal debt was nearly $15 trillion and we were in a $65.5 trillion dollar financial hole -- that's more than $550,000 per American household.

2. Second, he needs to make it clear that we can't put our fiscal house in order without reforms to existing social insurance programs, as well as comprehensive tax reform that generates more revenue. It's simple math. Everything must be on the table.

Social Security, Medicaid and Medicare are all on a course to bankruptcy. With timely action, we can preserve these important social insurance programs. We can raise more tax revenue by making our tax system simpler, fairer and more competitive.

3. Third, the president must tell us that the cost of our current healthcare programs is the one thing that could bankrupt this country, and that reforms to date have not adequately addressed out of control health care costs.

Believe it or not, the U.S. is the only major industrialized nation that does not have a budget for what the government spends on healthcare. We are the only nation dumb enough to write a blank check for health care. That must end.

4. Fourth, he needs to put to rest claims that any cuts in defense will jeopardize our national security.

We currently spend more on defense than the next 15 countries combined -- and many of them are our allies! The Department of Defense is also a bloated bureaucracy. Any credible plan to control deficits and address our exploding debt burdens has to include reductions in defense spending.

5. Finally, the president needs to call the political system what it is: totally dysfunctional. The type of major reforms that are needed can not be accomplished until elected officials put their partisanship to the side and bridge the great ideological divide that exists in Washington, D.C. Elected officials must put America's interests above their personal and partisan interests. In fact, the so-called super committee's recent super-failure served to reinforce the most biggest deficit we face as a nation: a leadership deficit.

I've detailed each of these points in my Fiscal State of the Union address, but I'm just one citizen patriot. We need our president tell us the TRUE state of the union. In fact, we should demand it. All Americans should tell their elected officials that we want them to tell the truth and hear what they will do to restore fiscal sanity before it's too late.