Obama never said they didn't celebrate the kids' birthdays. What they said was that they don't load them up with gifts. They have parties. Sasha Obama Celebrates 9th Birthday With a Pizza Party
Here's the original quote from People Magazine that started this whole thing:
PEOPLE: Someone told me today that you don't do birthday presents.
Michelle: No, because we spend hundreds of dollars on a birthday party and movie tickets and pizza and popcorn ...
Barack: That sleepover is enough. We want to teach some limits to them. And their friends bring over presents.
Michelle: They get so much stuff that it just becomes numbing. Malia believes there is still a Santa Claus even though she's a little wary because some of her friends are non-believers. But Malia says, "Ma, I know there is a Santa because there's no way you'd buy me all that stuff." [Laughing]PEOPLE:So what does a slumber party at the Obama house look like?
Barack: They're pretty noisy.
Michelle: The older they get, they just talk a lot. But they're at the age where they're pretty self-sufficient. [For Malia's birthday] we're going to go swimming, see Wall-E, make pizzas, have sundaes.
Okay, this seems to contradict what I had previously read.