One is a modest package of tax credits and other subsidies intended to help middle-class Americans with some big expenses, like day care, student-loan payments and retirement savings. The other, intended to signal President Obama’s willingness to cut the budget deficit, calls for a three-year spending freeze in many discretionary domestic programs, and for increases no greater than inflation after that. The freeze would apply to lower priority programs in a sliver of the overall budget, while spending on administration priorities — like education and environment — would continue to grow.

The freeze would have a relatively small effect on spending — about $10 billion less in 2011 out of about $500 billion in programs. It would be foolish to cut any more deeply when the economy is still so troubled. The real value of the freeze would lie in Mr. Obama’s ability to use it politically — say by trading this deficit reduction for lawmakers’ votes on a jobs bill this year.

The problem with the initiatives is that even if they work as planned, Americans need much more. They need leadership that is more inspired and an agenda that is bigger and more detailed than these ideas. The country desperately needs bold moves, starting with the State of the Union address Wednesday night.

The Obama administration has done some important things. Without last year’s stimulus package, the economy would be in a far weaker state. Health care reform would be good for the economy and the budget, if it can be saved.

But there’s a crater in the economy where the job market used to be, a hole so deep that it would take at least 10 million new jobs to fill it. There are more than six jobless workers for every job opening, which means prolonged spells of unemployment for many of the nation’s 15.3 million jobless workers.

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Mr. Obama also must champion increased small business lending and direct creation of both skilled and low-skilled jobs. He must embrace ways to pay for initiatives, such as redeploying money from the bank bailout or endorsing a financial-transactions tax on Wall Street.

The danger is that the initiatives announced so far this week will move to center stage, eclipsing more difficult and more important needs. It is Mr. Obama’s job to make sure that does not happen.
I think this article does a good job of summarizing the possible effects these small efforts could have if coupled with healthcare reform and stronger economic initiatives. One thing I hadn't considered is the effect drastic spending cuts could have on the government's efficiency; a careful balance must be achieved.

Should healthcare reform pass, I think these measures may add up and begin to curb deficit spending. As of now though, I think Obama's primary focus should remain on the staggering unemployment rate rather than our deficit.