The President will speak in just a few minutes on the long-term deficit and strategies for getting it under control. Rep. Paul Ryan will be in attendance, along with cat food commission co-chairs Erskine Bowles and Alan Simpson. The speech can be watched live at Whitehouse.gov or above.

The advance reports I’ve seen of the speech make it a mixed bag. I think the part on entitlements will be significantly less consequential than many believe (and the poll numbers make that a pretty good strategy), but the overall spending cuts more consequential. Defense will see some hits as well. And there will be probably the same insistence on ending the high-end Bush tax cuts, again trying to cleave them from the entire set of tax cuts.

Of course this is a policy vision, not something that the President will just enforce. It sets up the beginning of a negotiation. And there will be some news on that front as well.

As to why we’re here at all, the President wants to win re-election and thinks that path includes a “serious” discussion on the future of the budget. There hasn’t been much of a serious discussion about the future of 14 million-plus unemployed workers. But the White House believes that will take care of itself. Either that, or they’re rationalizing this way:

“The White House shows little sign of worrying about a dip in growth and how it might affect the unemployment rate, which has fallen by a percentage point since the year began but still sits at 8.8 percent, danger territory for an incumbent president seeking reelection.

Obama advisers largely believe, instead, that the economy has moved on from what White House officials call a “Phase 1” recovery—in which the government was forced to cut taxes and spend heavily to pump up consumer demand and rescue the nation from the brink of another Great Depression.

Now, the officials believe, the recovery has reached “Phase 2,” where the prospects of a double-dip recession are slim, expanding growth can survive a hit in government spending, and the total level of spending cuts is less important than the composition of them. (That reasoning helps explain why the White House was willing to agree to $38.5 billion in cuts to the current-year budget in negotiations last week, while insisting on protecting education and research programs the administration sees as key drivers to future growth.)”

They’re just not that concerned about it, which is interesting, since their electoral future depends on a strong recovery. But what do I know?

Coming up in just a few minutes, at the bottom of the hour…

…One nugget that’s been leaked is that the President will call basically for negotiating for cheaper prescription drugs through Medicare. He scores it at a savings of at least $200 billion over 10 years. The Pharma deal is dead!

…The topline number that everyone will report is that Obama will call for $4 trillion in deficit reduction. But he does it over 12 years, which means a smaller reduction than Bowles-Simpson or letting the Bush tax cuts expire.

…Obama has taken the stage.

“This debate over budgets and deficits is about more than numbers on a page… it’s about the kind of future we want.”

…Obama starts by outlining the role of government, essentially to “do together what we cannot do as well for ourselves,” in the words of Abraham Lincoln.

This is a good paragraph:

Part of this American belief that we are all connected also expresses itself in a conviction that each one of us deserves some basic measure of security. We recognize that no matter how responsibly we live our lives, hard times or bad luck, a crippling illness or a layoff, may strike any one of us. “There but for the grace of God go I,” we say to ourselves, and so we contribute to programs like Medicare and Social Security, which guarantee us health care and a measure of basic income after a lifetime of hard work; unemployment insurance, which protects us against unexpected job loss; and Medicaid, which provides care for millions of seniors in nursing homes, poor children, and those with disabilities. We are a better country because of these commitments. I’ll go further – we would not be a great country without those commitments.

So far this reads like a lecture on government, the value of the welfare state and progressive taxation.

People are going to get rightfully mad at the notion that “we lost our way” on fiscal responsibility in the post-Clinton era, when George Bush had a Republican Congress for six years. He just can’t point the finger at Republicans when the moment warrants it.

Graf: “To give you an idea of how much damage this caused to our national checkbook, consider this: in the last decade, if we had simply found a way to pay for the tax cuts and the prescription drug benefit, our deficit would currently be at low historical levels in the coming years.” That’s, um, still true.

…The lecture had moved on to why rising debt is important. Now moving to the bond vigilantes…

Other than the bond vigilantes bit, I’d say that this preamble is generally 90% factual. Right now he’s explaining the budget itself, which is in fact 2/3 health care spending, the military and Social Security. What he’s leaving out is the massive spending in the form of tax expenditures.

…I love the brushing over of … “economists think that with the economy just starting to grow again, we will need a phased-in approach.” In other words, we shouldn’t really do this right now, but I’ll just throw that in as an aside and get on with the cutting.

…Pretty strong on the Ryan budget, not letting up.

…Obama says “put simply, this would end Medicare as we know it.” Killing Ryan on cutting taxes on the rich. Somebody pull the plug before Obama proposes something, so far this is fine!

The fact is, their vision is less about reducing the deficit than it is about changing the basic social compact in America. As Ronald Reagan’s own budget director said, there’s nothing “serious” or “courageous” about this plan. There’s nothing serious about a plan that claims to reduce the deficit by spending a trillion dollars on tax cuts for millionaires and billionaires. There’s nothing courageous about asking for sacrifice from those who can least afford it and don’t have any clout on Capitol Hill. And this is not a vision of the America I know.

The America I know is generous and compassionate; a land of opportunity and optimism. We take responsibility for ourselves and each other; for the country we want and the future we share. We are the nation that built a railroad across a continent and brought light to communities shrouded in darkness. We sent a generation to college on the GI bill and saved millions of seniors from poverty with Social Security and Medicare. We have led the world in scientific research and technological breakthroughs that have transformed millions of lives.

…Ahh, he didn’t just walk off the stage after ripping Ryan a new one. Ah well.

So there’s the topline number, $4 trillion over 12 years. There are some parts to this: keeping discretionary domestic spending low and cutting defense is the first. I should note that there are twice as many discretionary cuts as there are in defense in this plan. In Bowles-Simpson is was 1:1.

…The health care stuff:

The third step in our approach is to further reduce health care spending in our budget. Here, the difference with the House Republican plan could not be clearer: their plan lowers the government’s health care bills by asking seniors and poor families to pay them instead. Our approach lowers the government’s health care bills by reducing the cost of health care itself.

Already, the reforms we passed in the health care law will reduce our deficit by $1 trillion. My approach would build on these reforms. We will reduce wasteful subsidies and erroneous payments. We will cut spending on prescription drugs by using Medicare’s purchasing power to drive greater efficiency and speed generic brands of medicine onto the market. We will work with governors of both parties to demand more efficiency and accountability from Medicaid. We will change the way we pay for health care – not by procedure or the number of days spent in a hospital, but with new incentives for doctors and hospitals to prevent injuries and improve results. And we will slow the growth of Medicare costs by strengthening an independent commission of doctors, nurses, medical experts and consumers who will look at all the evidence and recommend the best ways to reduce unnecessary spending while protecting access to the services seniors need.

Now, we believe the reforms we’ve proposed to strengthen Medicare and Medicaid will enable us to keep these commitments to our citizens while saving us $500 billion by 2023, and an additional one trillion dollars in the decade after that. And if we’re wrong, and Medicare costs rise faster than we expect, this approach will give the independent commission the authority to make additional savings by further improving Medicare.

But let me be absolutely clear: I will preserve these health care programs as a promise we make to each other in this society. I will not allow Medicare to become a voucher program that leaves seniors at the mercy of the insurance industry, with a shrinking benefit to pay for rising costs. I will not tell families with children who have disabilities that they have to fend for themselves. We will reform these programs, but we will not abandon the fundamental commitment this country has kept for generations.

Basically, extends the cost savings in the Affordable Care Act, adds bulk purchasing of prescription drugs, increases the power of the Independent Payment Advisory Board.

…The Social Security bit is verbatim from the State of the Union. Basically, it’s “you deal with it, Congress, and get back to me.”

…”I refuse” to renew tax cuts for the rich again.

This is the breakdown:

This is my approach to reduce the deficit by $4 trillion over the next twelve years. It’s an approach that achieves about $2 trillion in spending cuts across the budget. It will lower our interest payments on the debt by $1 trillion. It calls for tax reform to cut about $1 trillion in spending from the tax code. And it achieves these goals while protecting the middle class, our commitment to seniors, and our investments in the future.

That’s a 2:1 ratio of spending to taxes to close the deficit.

…This debt failsafe is pretty silly:

In the coming years, if the recovery speeds up and our economy grows faster than our current projections, we can make even greater progress than I have pledged here. But just to hold Washington – and me – accountable and make sure that the debt burden continues to decline, my plan includes a debt failsafe. If, by 2014, our debt is not projected to fall as a share of the economy – or if Congress has failed to act – my plan will require us to come together and make up the additional savings with more spending cuts and more spending reductions in the tax code. That should be an incentive for us to act boldly now, instead of kicking our problems further down the road.

You can’t bind future Congresses. But the idea that you should is pretty stupid. You can’t talk about 2014 and forced spending cuts unless you know what the economy looks like in 2014.

Here’s the “some will say, others will say” part that’s in all Obama speeches. One directly tackles the notion that talking about spending with 8.8% unemployment is crazy:

Others will say that we shouldn’t even talk about cutting spending until the economy is fully recovered. I’m sympathetic to this view, which is one of the reasons I supported the payroll tax cuts we passed in December. It’s also why we have to use a scalpel and not a machete to reduce the deficit – so that we can keep making the investments that create jobs. But doing nothing on the deficit is just not an option. Our debt has grown so large that we could do real damage to the economy if we don’t begin a process now to get our fiscal house in order.

The stimulus from payroll tax cuts is gone. Period. It was cancelled out by the 2011 budget deal. The rest of this just asserts that doing nothing is not an option. Evidence-free.

…Then there’s this:

Indeed, to those in my own party, I say that if we truly believe in a progressive vision of our society, we have the obligation to prove that we can afford our commitments. If we believe that government can make a difference in people’s lives, we have the obligation to prove that it works – by making government smarter, leaner and more effective.

Well, we can prove that. We have proven that. It’s called “let the Bush tax cuts expire.” And, scene. We can do a few other things at the margins, but that about does it.

…This is the news peg:

And in early May, the Vice President will begin regular meetings with leaders in both parties with the aim of reaching a final agreement on a plan to reduce the deficit by the end of June.

So that’s the timeline.

…wrapping up. This could have been a ton worse. Other than the fact that this speech is being given at all, I didn’t have a major problem with it.