Obama to Boehner: "We Don't Have a Spending Problem"

Posted: Jan 08, 2013 10:26 AM

The truth hurts, especially when you're coming awfully close to being crowned Captain Six Trillion.  Steve Moore's exclusive sit-down with House Speaker John Boehner reveals that the president is in deep ideological denial, and can get a bit testy when confronted with the facts:

What stunned House Speaker John Boehner more than anything else during his prolonged closed-door budget negotiations with Barack Obama was this revelation: "At one point several weeks ago," Mr. Boehner says, "the president said to me, 'We don't have a spending problem.'" The president's insistence that Washington doesn't have a spending problem, Mr. Boehner says, is predicated on the belief that massive federal deficits stem from what Mr. Obama called "a health-care problem." Mr. Boehner says that after he recovered from his astonishment—"They blame all of the fiscal woes on our health-care system"—he replied: "Clearly we have a health-care problem, which is about to get worse with ObamaCare. But, Mr. President, we have a very serious spending problem." He repeated this message so often, he says, that toward the end of the negotiations, the president became irritated and said: "I'm getting tired of hearing you say that."

The full piece is worth a perusal, if only to read Boehner basically confirm the account that he reacted to Harry Reid's ugly "dictatorship" characterization by encouraging the Senate Majority Leader to perform an anatomically challenging act on himself.  Boehner also candidly assesses his own enthusiasm over retaining his current position: 

Mr. Boehner looks battle weary from five weeks of grappling with the White House. He's frustrated that the final deal failed to make progress toward his primary goal of "making a down payment on solving the debt crisis and setting a path to get real entitlement reform." At one point he grimly says: "I need this job like I need a hole in the head."  

But consider Obama's mindset on America's unsustainable government outlays.  "We don't have a spending problem" are the words of a cloistered ideologue, considering the incontrovertible evidence.  It's actually frightening.  Obama seems to believe the "health care problem" he describes is a separate and discrete issue from the larger spending binge.  How so?  He's right that entitlement-driven unfunded liabilities are far and away the biggest (but not only) drivers of our long-term debt -- but this surely constitutes spending,  no?  And what, exactly, has this president done to reduce our "health care problem"?  He massively expanded one severely underfunded program (Medicaid) while cutting another nearly insolvent program (Medicare) by over $700 billion, then siphoning that money into a brand new, enormous, and unaffordable health care program (Obamacare).  The highest-profile element of the House-passed budget was Paul Ryan's bipartisan Medicare reform package.  The White House loudly rejected it, and amplified their opposition throughout the campaign.  What's their big solution?  They don't have one:


"You are right to say we're not coming before you today to say 'we have a definitive solution to that long term problem.' What we do know is, we don't like yours."  

It is an unambiguous fact that the federal government has a spending problem.  Mitch McConnell, Boehner, Pat Toomey and others are right to declare the revenues debate "resolved."  Obama got his soak-the-rich tax wish, with no new spending restraint in return.  And for the record, even if Uncle Sam brings in every penny of projected revenue, it'll only amount to about $600 billion over ten years.  The newly-discovered Social Security math error works out to $800 billion.  So 3/4 of that additional shortfall could be satisfied via this tax hike...if it hasn't already been exhausted on brand new expenditures.  I'll leave you with four pieces of empirical data.  (1) The brutal numbers, via two members of President Clinton's bipartisan commission on entitlement reform:

When the accrued expenses of the government's entitlement programs are counted, it becomes clear that to collect enough tax revenue just to avoid going deeper into debt would require over $8 trillion in tax collections annually. That is the total of the average annual accrued liabilities of just the two largest entitlement programs, plus the annual cash deficit. Nothing like that $8 trillion amount is available for the IRS to target. According to the most recent tax data, all individuals filing tax returns in America and earning more than $66,193 per year have a total adjusted gross income of $5.1 trillion. In 2006, when corporate taxable income peaked before the recession, all corporations in the U.S. had total income for tax purposes of $1.6 trillion. That comes to $6.7 trillion available to tax from these individuals and corporations under existing tax laws. In short, if the government confiscated the entire adjusted gross income of these American taxpayers, plus all of the corporate taxable income in the year before the recession, it wouldn't be nearly enough to fund the over $8 trillion per year in the growth of U.S. liabilities. Some public officials and pundits claim we can dig our way out through tax increases on upper-income earners, or even all taxpayers. In reality, that would amount to bailing out the Pacific Ocean with a teaspoon.  

(2) A striking visualization of the spending problem, via Yuval Levin:

(3) This White House chart:

(4) This verbatim statement, via President Barack H. Obama:

By the end of this decade, the interest we owe on our debt could rise to nearly $1 trillion. Just the interest payments. Then, as the Baby Boomers start to retire and health care costs continue to rise, the situation will get even worse. By 2025, the amount of taxes we currently pay will only be enough to finance our health care programs, Social Security, and the interest we owe on our debt. That’s it. Every other national priority – education, transportation, even national security – will have to be paid for with borrowed money.  

If the president can survey this array of data and make his 'no spending problem' claim with a straight face, then I'm afraid he has a reality problem.  But if he's willing to acknowledge the basic arithmetic, then what's his meaningful solution to eliminating -- or even significantly reducing -- that debt, as illustrated in item three?