The latest economic forecasts are now projecting that the federal budget deficit will reach a record of nearly $1.5 trillion in 2011. As the Wall Street Journal reports, this “grim outlook landed a day after President Barack Obama outlined plans to push for new spending that he said would help keep the U.S. globally competitive in his State of the Union speech, and the data could complicate that effort. Republicans have dismissed the president’s plans as ignoring the more pressing need to reduce the deficit”.

As the President prepares to heap further fiscal burdens upon the American taxpayers, let’s take a look at our nation’s current “big-ticket items” that compose the majority of our federal budget. Currently, the largest spending categories continue to be:

• Medicare & Medicaid: 25% of the budget; costing $948 billion
• Social Security: 20% of the budget; costing $757 billion
• War and Defense: 20% of the budget; costing $759 billion
• Welfare: 17% of the budget; costing $668 billion
• Interest on the Debt: 7% of the budget; costing $276 billion

According to MyGovCost.org’s Director Emily Skarbek, there are important measures that can be taken to scale back these enormous liabilities. She suggests the following initiatives:

• Raise the Medicare eligibility age to 70, cutting $104 billion by 2030
• Cap the Medicare growth to GPD by 2013, cutting $562 billion by 2030
• Raise the Social Security retirement age to 70, cutting $247 billion by 2030
• Reduce troop engagements in Afghanistan and Iraq to 30,000 by 2013, cutting $169 billion.

By simply adopting these four reforms, Dr. Skarbek asserts that the federal government would close the spending gap by $1.03 trillion from the projected $1.5 trillion annual shortfall.

“The United States faces daunting economic and budgetary challenges,” CBO Director Douglas Elmendorf said. Until the President acknowledges this stark reality, the state of our union can not—and will not—be sustainable.