President Joe Biden delivered the annual State of the Union address to the country on Tuesday night. The State of the Union is aspirational – laying out how the president sees the current situation and actions they propose to take going forward. And it is followed by a response from the party out of the White House, which is typically critical of those aspirations. Arkansas Governor and former Trump Administration Press Secretary Sarah Huckabee Sanders gave the response.

We’d have preferred more talk about the upcoming federal budget for Fiscal Year 2024 (FY24) – we’re nerdy like that! But the president gave little away on that front. And while Gov. Sanders decried “trillions in reckless spending and mountains of debt” she also failed to really discuss budgetary matters. At one point, referring to oversight on pandemic spending, the president noted that “watchdogs are back.” But we never left! So, from a budget watchdog’s perspective, here’s what we see as the “Real State of the Union” for your consideration.

Deficit discussion

This year, the most pressing issue in Washington will be the partisan battle over the budget deficit and the looming debt ceiling. We’ve said – repeatedly – that Congress allowing the federal government to default on the debt ceiling would be catastrophic. Not only could it hasten a recession, but it would create a waterfall of financial issues for everyone, from America’s largest corporations down to individuals.

In the State of the Union, the president attributed a quarter of the total federal debt ($31.45 trillion when he gave his speech) to former President Trump, but the truth isn’t as clear cut. As we’ve said, it is always challenging to figure out how much spending was on whose watch. Besides, some of that spending was for the pandemic and was broadly bipartisan. Assigning blame at one party or another won’t fix the situation we find ourselves in anyway. The US has been in debt for its entire history. As a budget watchdog, we obviously want to reform spending and revenue habits, but hostage-taking of the debt limit will be costly. As we have said before, the debt limit should be eliminated.

Disaster and climate change

As expected, President Biden mentioned the far-reaching impacts of climate change on the ground, from droughts and flooding to storm damages and wildfires. While the taxpayer costs of these climate-related disasters weren’t front and center in the president’s speech, we’re busy tracking the growing costs of climate change for federal taxpayers. This includes everything from ad hoc agricultural disaster aid to wildfire spending – and much more in between. It’s not just about fighting fires, though (literally), but also about investing in common sense climate solutions. This includes pre-sponding to disasters to build future resilience instead of sending more taxpayer dollars out the door after disasters strike. One of the easier climate solutions, which the president alluded to, includes expanding conservation investments that lead to increased public benefits, including more carbon sequestration in our nation’s farmland and forests.

Tax policy

The president did highlight the provision of the Inflation Reduction Act that will increase IRS funds by $80 billion. In addition to adding needed personnel to the agency’s depleted workforce and replacing dilapidated 60-year-old computer systems, the cash infusion will enable the agency to conduct more complicated audits and target sophisticated abusive tax shelters. And as the president noted, the Congressional Budget Office estimates this provision would reduce the deficit by more than $100 billion.

Energy and Natural Resources

The president quickly pointed out that the world’s biggest oil companies have made record profits this year. Their $200 billion in profits, made during a global energy crisis, shows that the oil and gas industry is doing more than fine and doesn’t need our tax dollars propping up their already profitable industry. When gas prices were sky-high and big oil raked in the dough, they chose to reward shareholders instead of investing that money into more production. Oil and gas companies waste billions of cubic feet of methane every year through the practice of venting and flaring, costing taxpayers millions of dollars in lost revenue and depriving consumers of a valuable resource. It’s time to hold them accountable.

National Security

The president had relatively little to say about the war in Ukraine this year. However, he did tell Ukrainian Ambassador to the United States, Oksana Markarova “Ambassador, America is united in our support for your country…We will stand with you as long as it takes.” We agree that Russian territorial aggression must be met with a united international front. We also believe that the tens of billions of taxpayer dollars already sent to Ukraine must be appropriately overseen and accounted for.

We’re hoping the FY24 Pentagon budget will continue the Biden Administration’s previous quest to retire some outdated and less-than-capable legacy military systems. In the New York Times, TCS president Steve Ellis referred to Congress as having a hoarding disorder by refusing to allow the military services to divest themselves of older weapons and ones that don’t perform as needed. Time for an intervention!

Transportation

The president spent considerable time touting the investments made by the Infrastructure Investment and Jobs Act. This $1.2 trillion package was the subject of a House Transportation and Infrastructure Committee oversight hearing held last week. For this investment to work, it will be imperative that lawmakers perform proper oversight and not allow more parochial interests to take preference over efficient and effective infrastructure projects.

The 116^th and 117^th Congresses made record investments and spending, so now it falls on the 118^th to ensure that all that money is spent wisely and in accordance with its original intention. There is much to be done this year, from raising the debt ceiling to the Farm Bill and passing a new budget. As always, we’ll be engaged in watchdoggery and keeping you up to date on what’s happening here in Washington.