President Obama is widely expected to call for a three-year spending freeze on key areas of his discretionary budget during the State of the Union address on Wednesday evening, but critics are already warning that now is not the time to cut spending just as the country is emerging from a recession.

Obama previewed the speech earlier in the week when he and Vice President Joe Biden outlined a set of proposals for helping the middle class, including expanding some tax credits such as the Child and Dependent Care Credit and the Saver’s Credit. He is also expected to call for eliminating capital gains taxes on investments in small businesses and giving tax credits to small businesses that hire new employees. Obama is also expected to reiterate the need for measures such as tax breaks for purchases of new facilities and equipment.


However, the administration is coming under pressure from critics who worry that the record levels of deficit spending aimed at stimulating the economy are loading the country with an ever mounting debt ceiling that could burden future generations of taxpayers.

Obama’s proposal for a spending freeze, even though it would affect only a relatively small percentage of his budget, might help defuse this argument, but it also could severely crimp the prospects of getting some of his own legislative priorities paid for.

In the meantime, some in Congress want to create a special deficit commission that would recommend a set of tax law modifications and spending cuts that Congress would have to vote for or against without changing them. An amendment with such a proposal was narrowly defeated by the Senate this week, but still garnered 53 votes, just seven votes shy of the 60 needed to pass in the Senate these days.

The amendment would have required Congress to vote the entire package of deficit-reducing measures either up or down, and entrust the decisions on which measures to include or exclude to the yet-to-be-appointed commission. Despite the defeat of the amendment, the president still plans to name such a commission in the hopes of proving his deficit-cutting bona fides.

However, getting Congress to accept a set of recommendations that could potentially include cuts in Medicare and Social Security would be a tough sell, especially in a crucial election year. It is likely that if the deficit commission is created, Congress would wait to vote on its proposals until after the midterm elections.

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