Rising prices for everything from food to gas put a crimp on Americans' wallets.  Members of Congress and governors vow to both "tighten the belt" and "trim the fat" from government spending.  It's All Things Economic – A Primer on Federal and State Deficits on Smart Talk, tonight at 8 on witf TV.

The economic recovery is slowly taking root just as President Obama and Congress are poised to take up a defining debate –  whether to raise the nation's debt ceiling and how to reduce the federal deficit.  Sounds like a mixed message, right?   The national debt now sits (actually, it's moving every second) at about $14.2 trillion and the federal government  is close to hitting the legal borrowing limit.  The U.S. Treasury Department now estimates we will max out our credit on May 16.  If Congress doesn't raise the debt ceiling, the U.S. will no longer be able to borrow money.  The fierce and highly partisan public policy debate surrounds ways to eliminate the red ink while still investing in American growth and national defense.

Scott Ehrig, vice president and state investment manager, M&T Bank/ M&T Investment Group, is a guest tonight.  He says "The great debate of our time is what do we expect from our government, what are we willing to pay for it, and how do we reconcile them."  He points out that the cost of running our government has been growing as a percentage of gross domestic product since the beginning of the 20th century.  "In 1912, government constituted about 12 percent," he notes. "Now, it's almost 50% of GDP spending.  The rich economies of the world, the industrialized countries of the world, are spending enormous sums on government itself."

(Note:  Scott emailed me late this morning with a clarification to what I had written: "Government spending, as a percentage of GDP, has increased from ~12% in 1913 to nearly 50% today.  That figure is the average from the 13 "rich-world" or "developed" economies, not just the US.  So this problem, which underscores the debates we're having in the Commonwealth today, is an issue which is larger than even the U.S.  We are not alone in confronting this challenge, which is clearly the great political issue of our age."  Thanks, Scott!  That's why you're a terrific Smart Talk guest -- always insightful and striving for accuracy and clarity.  I appreciate it.)

Ehrig will be joined by G. Terry Madonna, Ph.D., director of the Franklin and Marshall College Center for Politics and Public Affairs, professor of Public Affairs, and director of the Franklin and Marshall College Poll.  Scott Meinke, Ph.D., associate professor of political science at Bucknell University, and John Micek, state house reporter for The Morning Call of Allentown.  John's blog, Capitol Ideas, is a must for public-policy junkies.  Scott Meinke weighs in, "The agreement on the CR (continuing resolution) this month for the rest of this year's budget tells us something about what might happen going forward.  It's notable that this compromise--which included more spending cuts than many Democrats wanted but far less than some Republicans wanted--unified the *center* of a polarized House.  Speaker (John) Boehner couldn't have passed the compromise agreement without considerable Democratic support.  And the opposition to the budget agreement came from both liberal Democrats and conservative Republicans."

Dr. Meinke adds that settling on an agreement regarding the debt limit highlights a sharp ideological divide.  "The House has just approved a budget blueprint that is a good reflection of where the more conservative wing of the national Republican party is,favoring both more tax reductions and major changes to Medicare," he says.  "Meanwhile, President Obama's speeches over the last few weeks have staked out a position that is notable in two ways.  On one hand, Obama is following the lead of Congress in emphasizing deficit reduction rather than attempting to push in a different direction.  On the other hand, his proposal sets up a contrast by calling for an end to some tax cuts and reductions in different spending areas, including defense.  The battle lines for 2012 are pretty clear in this debate!"  The S&P's warning this week that it could lower the U.S. credit rating if a deal isn't brokered soon, coupled with public opinion, is a huge driver of the agreement as well.

The federal efforts to cut spending come at the same time as Pennsylvania lawmakers struggle to close a $4 billion state budget deficit.  Unlike the federal government, the commonwealth cannot operate on a deficit and must end the fiscal year on July 1 with a balanced budget.  Gov. Tom Corbett has touched off spirited debate with his call for massive cuts in public and higher education and his refusal to enact a severance tax on natural gas extracted from the Marcellus Shale region.  He ran and won the governorship on a pledge not to raise taxes.

We want to hear what you think about the federal and state deficits, spending, and public-union reform.  Call in live tonight to 1-800-729-7532, send us an email at This e-mail address is being protected from spambots. You need JavaScript enabled to view it , or post a comment to www.facebook.com/witf.org.