Create Jobs Not Deficits

President Obama must use his State of the Union speech to make clear his commitment to two economic imperatives: accelerating job growth and controlling the federal deficit. He must persuade Americans that we do not have a choice between the two. We have to do both, and we have to get the timing right.

That means pushing hard for faster job creation, but also warning about looming federal deficits and their threat to prosperity. It means promising to work actively with Congress to control the rising debt.

Pivoting to deficit reduction is not me-tooing the Republicans. The pivot would have been necessary even if the Democrats had won. Fiscal responsibility is not about smaller government; it is about paying for the government we want.

Drastically cutting spending right now, as some Republicans advocate, would destroy jobs. But continued borrowing at projected rates will lead to a debt crisis, soaring interest rates and a plummeting dollar that could precipitate a deeper recession and destroy even more jobs. The president must get this danger across.

Mr. Obama must also expose the fallacy that rising debt can be controlled by cutting spending alone. True, we must reduce low-priority discretionary spending, both defense and domestic; slow the projected growth of Medicare and Medicaid; and restore Social Security to fiscal soundness. But we also need to care for an aging population and invest in the skills, research and modern infrastructure that power economic growth.

To pay those bills we will need more revenues. The president should rally both parties around serious tax reform that slashes most tax exclusions and deductions, lowers rates for most people and raises more money.

The president must use his speech to urge support for immediate action on a multiyear deficit reduction plan. America’s future prosperity and global power are on the line. Only the president can exert the budgetary leadership that will avert economic disaster.