More on the Obama speech later, but my initial reaction is that there wasn't a lot new here. He's talked about limiting discretionary spending before. He's talked about letting the Bush tax cuts for the wealthy expire before. He's talked about cutting spending on prescription drugs before. The most specific new big ticket items were a plan to change the Medicare growth target from GDP + 1% to GDP + 0.5% and his promise to rein in tax expenditures (though the latter was pretty vague).
But this was new too:
In December, I agreed to extend the tax cuts for the wealthiest Americans because it was the only way I could prevent a tax hike on middle-class Americans. But we cannot afford $1 trillion worth of tax cuts for every millionaire and billionaire in our society. And I refuse to renew them again.
That sure sounds like a very public ultimatum, doesn't it? So what happens next year if House Republicans flatly refuse to send him a bill that extends only the middle-class cuts? Then all the Bush tax cuts would expire.
Question: is Obama laying down a marker in hopes of getting a bill that extends only the middle-class cuts? Or is he laying down a marker knowing that Republicans will refuse to budge and therefore the entire Bush tax cut package will expire? Hmmm.