Addressing the Nation: President Obama on government spending and the economy

2:31 p.m. “We need to believe that we can do this together.”

2:26 p.m. “We have an obligation to prove we can afford our commitments,” and that government can make a difference in people’s lives, Obama says. That can be achieved through a “smarter, leaner more effective” government.

2:24 p.m. “I don’t need another tax cut. Warren Buffet doesn’t need another tax cut,” Obama says, if it means cutting scholarships like the ones that got him to the White House.

2:22 p.m. If the goals aren’t on target by 2014, Obama’s plan calls for more cuts and reduced spending. He says that should motivate us to get in gear now.

2:18 p.m. Step 4 is to reduce tax expenditures. One way to do this, Obama suggests, is to cut itemized tax reductions to the nation’s wealthiest 2 percent.

2:13 p.m. Obama has a plan to cut $4 trillion from the deficit in 12 years, based on bipartisan recommendations. “Every kind of spending is on the table.”

Step 1 is to reduce annual domestic spending to save $750 billion in 12 years. Step 2 is to find additional saving in the defense budget. Step 3 involves reducing health care costs by making cuts to wasteful subsidies, erroneous payments and prescription drug payments.

2:11 p.m. The plan would give a $200,000 tax cut to a wealthy tax payer by requiring 33 seniors each to pay $6,000 more for health care.

2:06 p.m. The plan to reduce the deficit by $4 trillion over the next 20 years is a “worthy plan, but the way this plan achieves those goals would lead to a fundamentally different America.” Proposed cuts of 70 percent to clean energy, 25 percent to education and 30 percent to transportation “are the kinds of cuts that tell us we can’t afford the America I believe in and that I think you believe in.”

2:03 p.m. “Here’s the truth.” About 2/3 of the budget is spent on Medicare, Medicaid, Social Security and National Security. Student loans, unemployment and veteran benefits and tax credts comprise 20 percent. Everything else is 12 percent.

1:59 p.m. Obama explains to young people while solving this problem is a priority. “Even after our economy recovers, our government will still be on track to spend more money than it takes in throughout this decade and beyond.” The good news, he says, is “we can solve this problem,” if we’re honest about what caused it.

1:56 p.m. “We lost our way in the decade that followed,” Obama says of America’s near debt elimination in the ’90s. He attributes the cause to trillions in unpaid taxes and an expensive prescription drug program that led to borrowing.

1:48 pm: President Obama takes the stage

President Obama addresses the nation on his long-term budget plans for government spending and the current state of the economy. Watch the president’s speech live on NewsWorks.org and follow our newsroom’s live blog.