Obama completely conceded the argument about the National Deficit. I doubt they'll actually manage to freeze spending and eliminate Earmarks*, but by conceding the argument, Obama has neutered even the smallest possibility of the government repairing the economy.
My economic State Of The Union would go like this:
"Economists call this a jobless recovery. I say that there is no such thing. Without jobs, there is no recovery. It is clear that corporations have neither the desire nor the incentive to provide employment, so the government must employ people to create more jobs. The projects that the government must undertake are anything but 'make-work'; the infrastructure of our nation has decayed to a point where repairs would be necessary even if our economy did not need a boost. Like the America of the Greatest Generation, we can pave the way for prosperity for the next fifty years. Fortunately, the United States can borrow at impossibly good rates of interest, so our debt won't go out of control, etc. etc."
I'd probably be more ironic about the Republican's dishonest dealing, particularly about the Deficit. It's clear that Republicans only call for debt reduction as a means of dismantling our economic safety net. All of their plans to reduce the Deficit are completely absurd, even after a cursory inspection.
*Eliminating Earmarks is stupid, by the way. If Congress doesn't direct the flow of money, then they're just writing the President a blank check.