@High Seas,
The Economist's take on the speech, and the current situation in DC is somewhat Old Hat.
The deficit hawks in the Republican party know full well that discretionary spending cuts around the edges are not enough.
The issue is one of politics not economics.
The conventional wisdom is that specifically broaching the subject of entitlement cuts is political suicide.
One way or the other the subject will have to be broached because the entitlement programs are unsustainable.
It's fairly axiomatic that large problems don't get seriously addressed until they are large catastrophes.
I'm sure there are plenty of Republicans and even some Democrats who want to address the large problem of entitlements, but few, if any, are willing to sacrifice their careers or the chances of their party to gain or retain the White House, to get the ball rolling.
So we witness this game of Chicken being played out.
The Republicans learned in the 90's that they can get all of the blame and none of the credit for reforms, and it seems clear that they do not intend to repeat that performance.
I suppose they will try and manuever the president and Democrats into addressing entitlements, but it won't work.
The only chance for the matter to be dealt with as a problem rather than a crisis is for the Republicans to win the White House and Senate in 2012, and even then I doubt that, individually, they will have the stomach for stepping on the third rail of American politics.
Maybe the conventional wisdom is wrong though.