Harry Hamburg  /  AP
Sens. John Barrasso, R-Wyo., and John Cornyn, R-Texas, listen as Senate Minority Leader Mitch McConnell speaks to reporters after the weekly caucus luncheons in Washington on Tuesday. McConnell says he's ready to work with Obama on Social Security and other tough issues.
updated 1/27/2011 11:08:04 AM ET 2011-01-27T16:08:04




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Chart: Interactive: U.S. budget deficits continues to soar


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News of deficits a wake-up call for policymakers




Story: CBO: U.S. budget deficit to hit $1.5 trillion


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    2. Budget deficits shrinking but set to grow after 2015
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Interactive: Interactive: Proposals for cutting the debt


Replay: Minute-by-minute of Obama's speech



Video: McConnell: Obama’s spending cut proposal ‘inadequate’ (on this page)





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Social Security's $2.5 trillion surplus
Social Security has built up a $2.5 trillion surplus since the retirement program was last overhauled in the 1980s. Benefits will be safe until that money runs out. That is projected to happen in 2037 — unless Congress acts in the meantime. At that point, Social Security would collect enough in payroll taxes to pay out about 78 percent of benefits, according to the Social Security Administration.


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Video: Deficit to hit record high

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    >>> the budget deficit as now reached a new all time highway, set to reach $1.5 trillion before the end of the year. that could put a dent in the president's big plans for more spending. with us now nbc political analyst , ed rendel. late night and early morning for many of us, but very sobering numbers from the budget deficit from the ceo. that's going to make it harder for the president to fulfill his plan to get more spending at a time when he's not been very specific about where the deficit cuts are coming from.

    >> of course neither have the republicans and i they's an important point to note. nobody is willing to say who's ox is going to be gored. and if we're going to reduce the deficit, at of oxes have to be gored. and the president and the congress have to step up and say this is tough medicine, mr. and mrs. america but we have to do it. we have to do it if we're going to get our fiscal situation under control. i haven't heard -- i thought the president was fairly honest last night when he said, look, the freeze only affects 12% of -- discretionary domestic spending only represents about 12% of the budget. we have to look at health care , and he's absolutely right. we have to have a serious discussion. but i agreed with a number of the things the congressman said, but it's amazing to me how republicans who always talk about running government like a business don't realize that businesses absolutely cut costs and cut expenses, but at the same time invest in new research and development . they'll cut costs and cut expenses, but bring in a new product line , they'll invest in bringing a new product line in because it can grow their business. they do it at the same time. and we can cut the deficit and yet invest in not only our future, but invest in short-term job creation which comes from infrastructure. we not only must do -- not only is that a good idea, it's an imperative. if we're going to get this economy back on track in the short run and we're going to win the battle for economic competitiveness in the long room.

    >> if we're going to be competitive, though, what the republicans were saying last night, paul ryan , the budget chair was saying that this president, this white house has spent too much. now we both know that some of this was the crisis to try to overcome what was a meltdown and it was money some of it was being committed by the previous administration, by the bush white house . but this is what paul ryan had to say last night and i want to get you to react to it.

    >> since taking office, president obama has signed into law spending increases of nearly 25% for domestic government agencies . all of this new government spending was sold as investment. yet after two years, the unemployment rate remains above 9%. and government has added over 3 trillion to our debt.

    >> does he have a point?

    >> first of all, a lot of it is voodoo economics because a lot of that t.a.r.p. money as you know has been repaid. a lot of the automobile money is in the process of being repaid. and everyone agrees that what president bush start and what president obama followed through on t.a.r.p. actually worked, not only to save this country's economy, but also to safe the global economy , number one. and what congressman ryan is not saying, if we hadn't invested in the stimulus the same budget office said that unemployment would be as high as 11% and maybe as high as 12%. so the stimulus did have a positive affect. do you remember how much of that $870 billion of stimulus spending was actually tax cuts ? $375 billion. so it's not an -- -it's not $870 billion of spending in this stimulus bill, it's $375 billion in tax cuts and less than $500 billion in new spending and the new spending did work to keep our unemployment rate down. one of the reasons it didn't is that we didn't spend enough money on infrastructure which clearly is the best producer of well paying jobs that can't be outsourced.

    >> governor, one of the first things that the president did in trying to get his arms around the deficit side of it is to threaten to veto any earmarks that come his way and he's already running into problems from senate democrats , harry reid in an interview with our own kelly o'donnell just now, this is what he had to say and he's not the only one.

    >> the american public should understand and i'm sure they will as time goes by that the president has enough power, he should just back off, he's got enough to do without messing in what we do. he feels this is good for him and his image and maybe it is, but he's wrong.

    >> so he's in trouble on the earmarks and one other thing, i got to ask you, as someone who was the mayor and the district attorney of the city of philadelphia , you know the urban environment better than anybody, what about the fact that they are sort of saying well down the road we'll some up with gun control language, but to talk about tucson and invoke the her heroism and the tragedy of those victims and not to talk about those magazines what, do you think?

    >> first of all, i understand the point that the president's people made after the speech that he didn't want anything to distract him from the economic message and i agree with that. but look, we ought to have gun control . if you poll the american people now about having clips that contain more than ten bullets, most will say we need to restrict them. no one needs a magazine with 33 bullets in it to protect their home. no one does. it's clear as the nose on your face. we have got to seize the momentum. i think the president should have -- he shouldn't have made it the centerpiece of his speech, but he should have said in referencing the green family, in referencing the mr. hernandez who was there, say, look, this is a time when america needs to take a deep breath and do what's needed. we all need the guts and the courage to say to special interests no, it's time for sensible limitations, no one needs a magazine clip with 33 bullet in it.

    >> ed rendel, the new nbc political analyst .


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