Institute Fellow, Urban Institute, a nonpartisan public policy institute; former director, CBO
What the president got right: He did recognize that we have a very severe long-run deficit problem. His response was to freeze non-security related discretionary spending. The freeze will save about $250 billion over the next decade. That is better than nothing, but it is a drop in a very large bucket.
He will also appoint a commission to suggest other deficit reducing measures. Commissions may play a role in educating the public about the nature of a problem, but they seldom provoke a change in policies. Nevertheless, commissions are cheap and it is worth a try. There is absolutely no sign that Congress will get serious about the problem on their own.
What the president got wrong: Under the title "Reviving Job Creation and Laying a New Foundation for Economic Growth" more than 50 initiatives are listed in non-security programs. It is a perfect illustration of how to increase the cost and complexity of government and its intrusiveness in the allocation of resources.
There may be some worthwhile programs in the list, but there is no way that we could know the effectiveness or the rate of return to most of them. If we do stumble across some that have merit, we should pay for them in the long run with other program cuts or tax increases.