When President Barack Obama declared last week that America “would not be a great country” were it not for Medicare, Medicaid, Social Security and unemployment insurance, he committed one brief moment of partial candor.
“By 2025, the amount of taxes we currently pay will only be enough to finance our health care programs — Medicare and Medicaid — Social Security, and the interest we owe on our debt,” he said. “That’s it. Every other national priority — education, transportation, even our national security — will have to be paid for with borrowed money.”
Obama’s basic fiscal construct here has analytical value, but his timeline is wrong.
We don’t need to wait more than a decade for the welfare state to bankrupt America. It is doing it now.
Government programs Obama views as indispensable are already eating up more than every tax dollar hardworking Americans pay to the federal government.
Here’s a quick accounting based on the actual numbers for fiscal 2010 reported by Obama’s Treasury Department:
Total federal tax revenues in 2010 were $2.0377 trillion.
Social Security cost $571.5 billion — rounded to the nearest hundred million. Medicare cost $513.7 billion. Medicaid cost $268 billion. And unemployment insurance cost $156.7 billion.
The interest on the national debt for the year was $186.3 billion.
On top of the cost of the actual benefits doled out by welfare-state programs, the federal government also needed to pay $176.2 billion in salaries to federal workers and $63.7 billion for insurance benefits for these workers.
All of these expenses added up to $1.9361 trillion — or 95 percent of the government’s $2.0377 trillion in tax revenue.
After paying for just the expenses listed above, the federal government had only $101.6 billion in tax revenue left.
Now, in his speech declaring that America would not be a great country if not for Medicare, Medicaid, Social Security and unemployment insurance, the next federal spending “priority” Obama mentioned was “education.”
Leaving aside whether the federal government has any constitutional authority to meddle in primary and secondary education (it does not), is it fair to assume that Obama and other pro-welfare-state liberals would not countenance eliminating — or even significantly curtailing — federal education spending?
I think it is fair.
According to the Treasury, “Education Department programs” cost the federal government $251.9 billion in fiscal 2010. If you subtract this $251.9 billion from the remaining $101.6 billion in tax revenue, you end up with a deficit of $150.3 billion.
That means that after paying for the main federal welfare-state and education programs last year, the federal government was already in debt.
It thus needed to borrow every penny that it paid for the Defense Department, the State Department, the Department of Homeland Security and the Justice Department, all of which — unlike the welfare-state programs and the Department of Education — carry out core constitutional functions of the federal government.
According to the Treasury, the national debt increased $1.652 trillion last year.
So, who’s to blame?
Well, you could blame the Founding Fathers. After all, they are the ones who framed a Constitution that authorized the central government to maintain a national defense, conduct diplomacy, secure our borders and enforce the federal laws.
Or you could blame the architects of the federal welfare state. These are the politicians who built the wealth-redistributing programs that are now breeding government dependency in America, pushing us deep into debt and driving us toward an economic catastrophe that may do permanent damage not only to our prosperity but to our liberty.
This is where the blame belongs.
It belongs to President Franklin Delano Roosevelt for threatening to pack the Supreme Court with Democratic liberals if the court did not agree to distort the meaning of the General Welfare Clause of the Constitution and allow him and a liberal Congress to flout the true limits on federal power and enact the first federal welfare program in Social Security.
It belongs to Lyndon Baines Johnson, who expanded the federal welfare state in 1965 with Medicare and Medicaid, making the elderly and the poor in this country dependent on the federal government for health care. It belongs to George W. Bush, a “big government conservative,” who not only made peace with the welfare state but resolved to make it bigger.
History will remember “W” as the Republican who massively increased federal involvement in education through the No Child Left Behind Act and who significantly increased the insolvency of Medicare by creating a prescription drug entitlement.
And, of course, it belongs to Obama.
Our current president saw the nation heading toward bankruptcy driven by the welfare state and signed legislation forcing every American to buy a government-approved health insurance plan and promising to subsidize that purchase for all households earning up to 400 percent of the poverty level.
Had FDR, LBJ, W and Obama all failed — had Social Security, Medicare, Medicaid, the drug entitlement and Obamacare never been enacted — America most assuredly would still be a great country.
And government would have less control over our lives.
It is time to prove our greatness again by turning our course back to limited government and self-reliance.