Rhetorically there was much to like in President Barack Obama’s speech to Congress last night. None better than this early statement:

The answers to our problems … exist in our laboratories and universities, in our fields and our factories, in the imaginations of our entrepreneurs and the pride of the hardest-working people on Earth. Those qualities that have made America the greatest force of progress and prosperity in human history we still possess in ample measure.

We couldn’t agree more. America has been “the greatest force of progress and prosperity in human history” and we can continue to do so … as long as our politicians allow us the freedom to do so. Unfortunately, for every perceived problem in our current crisis, the Obama Administration promotes a heavy handed government solution. The list of new and expanded government initiatives was nothing if not audacious, including: a new national health care plan within a year, thousands of mile of power lines and wind turbines, expanded mass transit, a massive new carbon tax, a reconstructed auto industry, more pay for teachers, increased pay for soldiers and Marines, ending the Iraq war, and a new national service program. He even promised a cure for cancer. He promised he could do all this while reducing our nation’s exploding budget deficit. Color us skeptical.

There is no doubt that our policies in Washington must change. But the last eight years have already seen an explosion in the size and power of our federal government. If more invasive government was the answer, then we would be doing great right now. We’re not. There is a better, realistic path:

Keep the “Stimulus” Temporary – The President should pledge to oppose any attempts to make permanent any stimulus provisions that are not fully offset by lower-priority spending cuts. This spending was sold to the American people as temporary, and that promise should be kept. Extending this spending would require permanently raising taxes by nearly $3,000 per household.

Resist False Promises of a Free Lunch – Some have suggested that Obama can expand Medicare drug subsidies for seniors as well as add millions of Americans to government health care rolls without increasing the health care budget. This is completely unrealistic.  Such government expansions are totally unaffordable in today’s economic and budgetary climate.

Address Social Security, Medicare, and Medicaid – These three programs already comprise 40 percent of all spending and are growing 7 percent annually on autopilot as 77 million baby boomers begin retiring. There is no way to bring the federal budget under control—or even close to balance—until these programs are reformed. To bring honesty back to Washington, President Obama should incorporate the massive long-term unfunded obligations of these programs into his budget and require Congress to focus on the long-term fiscal implications of their policies.

Support Spending Caps – In each of the past two years, Congress has passed budgets expanding discretionary spending by 8 percent. On top of that, they enacted $333 billion in “emergency” spending in 2008 and passed a $1.1 trillion “stimulus” this year. Clearly, the budget process created to help lawmakers set priorities and make trade-offs has collapsed. Enforceable spending caps can provide the structural rules necessary to make the difficult but necessary budget choices.

Avoid Harmful Tax Hikes – Higher tax rates discourage work, investment, saving, and entrepreneurial activity. Though Obama may propose that he will not raise taxes until 2011, the fact is the threat of these higher taxes is already depressing economic activity in the middle of the recession. Businesses are already foregoing investments in equipment anticipating Obama’s inevitable tax hikes. If all of the tax cuts enacted during the Bush Administration expire, families would see a tax increase of $2,000 per year on average and an additional loss of $1,800 per year due to slower economic growth. The average job growth for each congressional district would be reduced by over 2,000 jobs.

The character traits Obama invoked last night – personal responsibility, hard work, sacrifice, entrepreneurial creativity, resiliency, decency, and fairness – are the key to our economic recovery, not massive new government intervention in the lives of Americans. Our government should be pursuing policies that free the American people to pursue their dreams, not suffocating the American people with new spending, taxes, and government mandates.

Quick Hits:

  • According to Gallup, Just one-fourth of Americans think the government should continue lending money to Detroit automakers.
  • According to Rasmussen Reports, given the choice between federal bailouts for the auto companies, the finance industry and financially trouble homeowners or no bailouts for any of them, 54% say no bailouts period.
  • California’s carbon capping policies are turning out to be much more costly than their proponents advertised.
  • President Obama is expected to announce as early as Friday that he will remove all U.S. combat troops from Iraq by August 2010.
  • A French court overturned terrorist conspiracy convictions for five former inmates of the Guantanamo Bay Tuesday.