Speaker John Boehner Says We Have A Spending Problem

Speaker John Boehner and pretty much the entire Republican Party and even some Democrats say we have a spending problem, not a revenue problem. But with any Republican claim, you would be well advised to do a little research. Luckily I’ve done it for you!

The Tax Policy Center has a handy chart titled (“Historical Federal Receipt and Outlay Summary“). The source of this chart is the Office of Management and Budget (OMB). On this chart you will find the federal government receipts (tax revenue) and outlays (spending) from 1940 to 2011 along with 2012 to 2017 projections. They also present receipts and outlays as a percentage of Gross Domestic Product (GDP). It is this last statistic that we will focus on.

Let’s do a little math to see how far out of whack the year 2011 is when compared to the historical average.

RECEIPTS

15.4% Tax revenue (receipts) as a percentage of GDP for the year 2011.

minus

17.3% Average of tax revenue (receipts) as a percentage of GDP from 1940 to 2011.

equals

-1.9 Federal tax receipts deficit (in percentage points) for 2011 compared to historical average.

 

OUTLAYS

24.1% Spending (outlays) as a percentage of GDP for the year 2011.

minus

20.6% Average of spending (outlays) as a percentage of GDP from 1940 to 2011.

equals

+3.5 Federal outlays increase (in percentage points) for 2011 compared to historical average.

House Speaker John Boehner - photo by Talk Radio News Service

If John Boehner wants to make the case that spending is further off the historical mark than revenue, then fine, I’ll concede that point. But that is not what Boehner and Republicans are saying. They have no desire to increase tax revenue, even if they know it’s going to happen with or without their support. John Boehner and Republicans want you to believe that spending is entirely to blame for the federal deficit, but this simple math proves otherwise.

We are nearly 2 points off the historical mark on tax revenue. While it is true that spending is even further off the mark, do you think severe spending cuts in lieu of tax increases is the best approach with a fragile economic recovery? Do you think lower and middle-income Americans should suffer first with cuts to programs like Medicare before the wealthy have to pay more taxes? We have both a spending problem and a revenue problem, but an economic recovery is no time to start tackling the deficit on the spending side of the ledger, particularly when the revenue side is well below the historical average.

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EconomyGovernmentPoliticsTax Fairness

#debt#deficit#federal deficit#fiscal cliff#House#John Boehner#medicare#outlays#receipts#Republican#revenue#Speaker#spending#taxes

  • Steve

    Interesting. I would be curious to know the rough breakdown of that increase in outlays though. It probably isn’t across the board. Call me crazy, but I bet the military is getting more dollars than ever before, while the schools and firehouses, infrastructure, EPA, etc. (i.e. liberal/rational uses) are getting less. So sure, you can “concede that point” but only for the time it takes you to inhale before going off on the reasons behind it. 😉

    • We know military spending is insane, although that’s not a technical measure. 🙂 We also know that state and local governments have been suffering and the federal government has not stepped in with enough assistance to get through the economic downturn. That’s why over 600,000 public sector jobs have been lost. It’s just stupid. It only compounds the economic problem. As far as the economy is concerned, the problem isn’t that we have spent too much, the problem is we are spending too much in the wrong areas and not enough in the right areas, as you suggest. But this is all conjecture I guess until such time that I gather the evidence and write about it. 🙂