The Savage Truth on Money by Terry Savage

The president took a decisive step back to the center in his State of the Union Address — especially when it came to proposals that would affect the economy. In fact, he sounded so fiscally conservative that the Republican address, which followed his speech, looked like an amateur imitation — without any of the charisma.

On the subject of taxes, the president stressed his tax cuts, which are really credits for lower-income earners, and he bragged that he hadn't raised income taxes a single dime.

President Obama delivers his first State of the Union Address on Capitol Hill in Washington on Wednesday night. He acknowledged that "the true engine of job creation is American business."

He acknowledged that "the true engine of job creation is American business," saying that "government's role is to create the conditions for job expansion by small business."

There was a wide and appealing populist streak in the president's comments. He refrained from attacking the banks but acknowledged that "we all hated the bank bailout."

It was hard to disagree when he defended his proposal to put new fees or taxes on the large banks, saying, "They can afford it, if they can afford to pay huge bonuses."

Even redistribution seemed appealing when Obama promised to use some of that repaid bailout money to give to community banks, who would presumably be more willing to make loans.

He promised small business tax credits for hiring and the elimination of capital gains on small business investment, while ending tax breaks for "companies that send jobs overseas."

Education would receive more funding (even in the midst of a proposed budget freeze), and students would pay only 10 percent of their income to repay student loans.

Those who enter public service would find their loans forgiven after 10 years. And government would no longer pay banks subsidies to underwrite student loans. In place of that program would be a tax credit for college.

Health care reform would protect Americans from the insurance companies, as well as save money for the government. Military families would receive more support. Only homeowners seemed to be forgotten, with vague promises to make refinancing easier.

The president promised something to everyone. But he got his only real laugh (well, more like a snicker) when he explained that his spending freeze would take effect only in 2011, "when the economy is stronger." Any consumer trying to budget in this weak economy knows that you can't wait to cut your spending till better days come along.

Senate Democrats have called for a vote to raise the ceiling on the national debt to an astounding $14.3 trillion dollars. Contrast that with the president's strong promise: "I refuse to pass this (fiscal) problem to another generation of Americans."

The numbers speak for themselves. And that's the Savage Truth.

Terry Savage is a registered investment adviser and is on the board of the Chicago Mercantile Exchange. She appears weekly on WMAQ-Channel 5's 4:30 p.m. newscast, and can be reached at www.terrysavage.com. She is the author of the new book, "The New Savage Number: How Much Money Do You Really Need to Retire?" To find out more about Terry Savage and read her past columns, visit the Creators Syndicate Web page at www.creators.com.

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