Top fund manager Bob Rodriguez of  First Pacific Advisors says the U.S. needs to get is financial house in order — and soon.

“We need significant fundamental reductions in expenditures at the Federal level this year because they’re not going to happen in 2012, which is an election year,” Rodriguez, back from his year-long sabbatical, tells Advisor One. “If not, by 2013 we’ll be sitting on more than $17 trillion in debt. Therefore, the window to start reform is only about seven months.”

Rodriguez says his position on equities involves a “high degree of defensiveness”. The energy sector remains his largest exposure, though it’s been reduced. “There’s no hot new area that I’m saying, ‘God! I have to focus in on that!'” he says.

Bonds, meanwhile, have Rodriguez worried. “We still won’t lend long-term money to the Federal government nor to other high-quality creditors because the interest-rate level remains inadequate to compensate,” he says.

Rodriguez also stresses the importance of liquidity, and offers one suggestion for how he’d attack the nation’s fiscal woes: “One solution is to increase our export position. That would require a whole host of things to be done in re-engineering and re-training. Instead, the government produced a temporary narcotics hit; i.e., short-term fixes: the cash-for-clunkers program and an $8,000 credit to buy a home.”