In a sobering holiday interview with C-SPAN, President Obama boldly told Americans: “We are out of money.”
C-SPAN host Steve Scully broke from a meek Washington press corps with probing questions for the new president.
SCULLY: You know the numbers, $1.7 trillion debt, a national deficit of $11 trillion. At what point do we run out of money?
OBAMA: Well, we are out of money now. We are operating in deep deficits, not caused by any decisions we’ve made on health care so far. This is a consequence of the crisis that we’ve seen and in fact our failure to make some good decisions on health care over the last several decades.
So we’ve got a short-term problem, which is we had to spend a lot of money to salvage our financial system, we had to deal with the auto companies, a huge recession which drains tax revenue at the same time it’s putting more pressure on governments to provide unemployment insurance or make sure that food stamps are available for people who have been laid off. So we have a short-term problem and we also have along-term problem. The short-term problem is dwarfed by the long-termproblem. And the long-term problem is Medicaid and Medicare. If wedon’t reduce long-term health care inflation substantially, we can’tget control of the deficit.
So, one option is just to do nothing. We say, well, it’s tooexpensive for us to make some short-term investments in health care. Wecan’t afford it. We’ve got this big deficit. Let’s just keep the healthcare system that we’ve got now.
Along that trajectory, we will see health care cost as anoverall share of our federal spending grow and grow and grow and growuntil essentially it consumes everything…
SCULLY: When you see GM though as “Government Motors,” you’re reaction?
OBAMA: Well, you know – look we are trying to help an auto industrythat is going through a combination of bad decision making over manyyears and an unprecedented crisis or at least a crisis we haven’t seensince the 1930’s. And you know the economy is going to bounce back andwe want to get out of the business of helping auto companies as quicklyas we can. I have got more enough to do without that. In the same waythat I want to get out of the business of helping banks, but we have tomake some strategic decisions about strategic industries…
SCULLY: States like California in desperate financial situation, will you be forced to bail out the states?
OBAMA: No. I think that what you’re seeing in states is thatanytime you got a severe recession like this, as I said before, theirdemands on services are higher. So, they are sending more money out. Atthe same time, they’re bringing less tax revenue in. And that’s apainful adjustment, what we’re going end up seeing is lot of statesmaking very difficult choices there…
SCULLY: William Howard Taft served on the court after his presidency, would you have any interest in being on the Supreme Court?
OBAMA: You know, I am not sure that I could get through Senate confirmation…