Tea Party Express' Amy Kremer says current tax revenues could cover interest, Medicare, Medicaid, Social Security

During a May 17, 2011, interview on Comedy Central’s The Colbert Report, Tea Party Express chair Amy Kremer offered host Stephen Colbert this statistic about the federal budget: "We bring in enough tax revenue," she said, "to service our debt, pay for Medicare and Medicaid and Social Security and then still have about $300 (billion) or $400 billion left over."

A reader asked us if we could fact-check this claim, so we did.

We turned to President Barack Obama’s fiscal year 2012 budget proposal, which includes a statistical table called "Proposed Budget by Category." While this table primarily lists Obama’s proposed budget over the next 10 years, it also includes the past two fiscal years -- 2010 and 2011 -- with dollar figures broken down in each of the categories we need to analyze Kremer’s statement.

Here’s what we found:

Fiscal year 2010

Interest on the debt: $196 billion
Medicare: $446 billion
Medicaid: $273 billion
Social Security: $701 billion

Subtotal: $1.616 trillion

Tax receipts: $2.041 trillion

Receipts minus expenses above: $425 billion


Fiscal year 2011

Interest on the debt: $207 billion
Medicare: $488 billion
Medicaid: $276 billion
Social Security: $742 billion

Subtotal: $1.713 trillion

Tax receipts: $2.047 trillion

Receipts minus expenses above: $334 billion

So using either year’s figures, Kremer is very close to correct.

But does her claim say anything meaningful about the federal budget? That’s less clear.

Left unspoken by Kremer are several other important components of the federal budget. The remaining $334 billion for fiscal year 2011 would have to cover such expenses as these:

Other mandatory programs: $716 billion
Non-security discretionary spending: $507 billion
Security discretionary spending (primarily defense and homeland security: $908 billion

Total: $2.131 trillion.

Now, it’s certainly possible to shrink these categories -- but getting down to $300 billion or $400 billion is not easy.

"Other mandatory programs" include those that are not funded annually by Congress but instead receive funds according to a pre-set formula. These include federal civilian and military retirement benefits, food stamps, unemployment compensation and veterans benefits. It’s possible to rewrite formulas for these programs in a way that drastically shrinks or even eliminates them, but it would pose a major challenge, both legislatively and politically.

The second category -- non-security discretionary spending -- is easier to cut in a practical sense, but even within this category are lots of expenditures that, while discretionary, aren’t easy to let go of, from food and drug safety to air traffic control.

Finally, Kremer’s comparison devotes not a dime to either the military or homeland security. Even cutting the current amount in half -- a course that’s almost entirely impractical in the short term -- would exceed Kremer’s excess amount for 2011 by more than one-third.

"Long before the country had Medicare, Medicaid or Social Security, it had an Army and Navy," said Gary Burtless, an economist with the centrist-to-liberal Brookings Institution. "I think the omission of ‘national defense’ from Ms. Kremer’s list of essentials is a pretty important clarification."

Rating Kremer’s statement is challenging, because what she said is undeniably true, but narrowly so, with missing factors that undercut her statement’s relevance. When we asked an ideologically diverse group of economists how useful they thought Kremer’s formulation was, their answers ranged widely.

For instance, J.D. Foster, an economist with the conservative Heritage Foundation, noted that some of the excess costs that Kremer left out of the equation could be picked up by reining in factors she did include. "If we're going to play ‘what if,’ then you have to allow that she may have wanted to cut some of Medicare, Medicaid and Social Security to make room for other spending that was off the list," he said.

Kremer deserves credit for doing the math correctly. However, her decision to ignore defense and homeland security spending -- to say nothing of mandatory programs like veterans benefits and safety-related discretionary spending -- makes the comparison of questionable value to a discussion of the nation’s budget problems. We rate her statement Half True.

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