How High Would Taxes Have to Go to Cover U.S. Debt?

This is a rush transcript from "Glenn Beck," April 13, 2009. This copy may not be in its final form and may be updated.

GLENN BECK, HOST: On Wednesday, I'm going to be taking this show on the road. We're going to San Antonio on Wednesday, live from the Alamo in San Antonio, Texas.

You can, I guess, celebrate with FOX News all day: "Your World With Neil Cavuto" — he'll be in Sacramento, California; this show is going to be then from the Alamo with our regular time; "Hannity" will be in Atlanta, Georgia; Greta is in Washington, D.C.

A guy that I have respected for a very, very long time is a guy who has watched over our nation's budgets. And I used an "S" — our books — because we actually have multiple books, it's a shell game. And it's a dishonor, I think, to everyone who loves our country.

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David Walker, you were the chief bean counter for a long time in Washington and did your best to change things from the inside. But it doesn't matter which party is in. They're both doing — they're both doing a service on our — on our debt, aren't they?

DAVID WALKER, FORMER U.S. COMPTROLLER GENERAL: Well, it's not a party of fiscal responsibility now.


WALKER: There are people who are fiscally responsibility. There are a lot more that are fiscally irresponsible than responsible.

You know, our debt is frankly worse than a lot of people realize. We have a short-term deficit and a structural deficit. And I'm here to tell you this: Taxes will go up.

Here's the problem: The longer we wait to reform entitlement programs, to put budget controls back in place, to constrain spending, the higher they're going to go up.

BECK: So, David, why doesn't anyone — first of all, I just have to — would you please verify, because you're a man of great credibility. I'm getting hammered in the press because they think I'm just hammering Barack Obama on this.

Will you verify, sir, that I have been on this debt problem for a very long time?

WALKER: You have. Quite frankly, George Walker Bush — Bush 43 — probably has the worst fiscal record to date of a president. But then again, it can be broken.


BECK: Oh, yes. It has been — you wear a pin here of the Sons of the Revolution. We have talked about that before. You've said it is your duty to stand up.

We talked about this when George W. Bush was in office. This is a disgrace that is happening, and what I feared, David, is that now, it's just accelerating, because we've missed our windows of opportunity on the "menu of pain."

Can you explain a bit on the "menu of pain"? What is that?

WALKER: The "menu of pain" is what Paul O'Neill wrote about several years ago where he said that if you ended up raising income taxes to try to be able to solve the problem, you would have to raise them about 75 percent.

If you end up raising Social Security taxes, and these are alone, you would have to almost double them. He basically had a list of items and if you dipped them in isolation, what it would take to balance the books.

Now, frankly, it's worse now. I think we have to recognize the fact that deficits and debt are going up in the short term because of the recession and unprecedented problems. We got to be able to start making tough choices.

BECK: OK. Here's where I can't understand how people don't understand this. What is the problem with G.M.? The problem with G.M. is they lost their way as a company for a while. But you could restart that.

Their real problem was legacy costs — legacy costs. They got into bed and they made stupid deals and everybody got greedy and everybody has thought, "Oh, this will just go on forever." It doesn't go on forever. That's the problem with our country. Legacy costs.

WALKER: Well, we have several problems. One, we've lost our way.

BECK: Yes.

WALKER: We think we're too big to fail.

BECK: Yes.

WALKER: And we have huge and growing legacy costs as well. We need to get back to basics. Government has over-promised and under-delivered. You can't tax our way out of this problem, although taxes will go up.

BECK: Oh, they have to, they have to.

WALKER: Yes. They will go up.

BECK: What happens, David when — we just saw this chart a minute ago — treasuries now are the only thing. But when the government just keeps spending more money and more money, they're just inflating our money, hyperinflation comes.

WALKER: We have two problems: We have huge deficits, which is fiscal policy, and we're printing money at record rates. The Fed has tripled their balance sheet in the last two years. You know, we're not going to have to pivot; we're going to have to do a dramatic turnaround once the economy starts to grow and we get past this immediate crisis.

The question is: How are we going to do it?

BECK: But we're — but we're putting in things like, now, universal health care. That's not going in the other direction.

WALKER: Well, what we have — look, we need comprehensive health care reform and that's some level of basic coverage that we can afford and sustain over time. But the last thing we need is "Part D" on steroids. That's Medicare prescription drugs on steroids. Let's see what people are proposing about.

BECK: But they are already taking the money in and they don't even have a — they don't have a...

WALKER: Yes. They problem is, is that it's easy to expand coverage and then say, gee, we'll pay for it down the road. It's kind of a Wimpy budget policy.

BECK: Yes.

WALKER: You know, I'll gladly pay you Tuesday for whatever I want today.

BECK: OK. Well, we're just printing all of the tax code now.

WALKER: I think a forest is going — is being felled.

BECK: Oh, yes. Somewhere Al Gore is weeping.


BECK: All right. Thank you very much, David. We appreciate it.

WALKER: Great to see you, Glenn. All the best.

BECK: Good to see you.

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