Obama spending binge never happened

WASHINGTON (MarketWatch) — Of all the falsehoods told about President Barack Obama, the biggest whopper is the one about his reckless spending spree.

As would-be president Mitt Romney tells it: “I will lead us out of this debt and spending inferno.”

Almost everyone believes that Obama has presided over a massive increase in federal spending, an “inferno” of spending that threatens our jobs, our businesses and our children’s future. Even Democrats seem to think it’s true.

But it didn’t happen. Although there was a big stimulus bill under Obama, federal spending is rising at the slowest pace since Dwight Eisenhower brought the Korean War to an end in the 1950s.

Even hapless Herbert Hoover managed to increase spending more than Obama has.

Here are the facts, according to the official government statistics:

• In the 2009 fiscal year — the last of George W. Bush’s presidency — federal spending rose by 17.9% from $2.98 trillion to $3.52 trillion. Check the official numbers at the Office of Management and Budget.

• In fiscal 2010 — the first budget under Obama — spending fell 1.8% to $3.46 trillion.

• In fiscal 2011, spending rose 4.3% to $3.60 trillion.

• In fiscal 2012, spending is set to rise 0.7% to $3.63 trillion, according to the Congressional Budget Office’s estimate of the budget that was agreed to last August.

• Finally in fiscal 2013 — the final budget of Obama’s term — spending is scheduled to fall 1.3% to $3.58 trillion. Read the CBO’s latest budget outlook.

Over Obama’s four budget years, federal spending is on track to rise from $3.52 trillion to $3.58 trillion, an annualized increase of just 0.4%.

There has been no huge increase in spending under the current president, despite what you hear.

Why do people think Obama has spent like a drunken sailor? It’s in part because of a fundamental misunderstanding of the federal budget.

What people forget (or never knew) is that the first year of every presidential term starts with a budget approved by the previous administration and Congress. The president only begins to shape the budget in his second year. It takes time to develop a budget and steer it through Congress — especially in these days of congressional gridlock.

The 2009 fiscal year, which Republicans count as part of Obama’s legacy, began four months before Obama moved into the White House. The major spending decisions in the 2009 fiscal year were made by George W. Bush and the previous Congress.

Like a relief pitcher who comes into the game with the bases loaded, Obama came in with a budget in place that called for spending to increase by hundreds of billions of dollars in response to the worst economic and financial calamity in generations.

By no means did Obama try to reverse that spending. Indeed, his budget proposals called for even more spending in subsequent years. But the Congress (mostly Republicans but many Democrats, too) stopped him. If Obama had been a king who could impose his will, perhaps what the Republicans are saying about an Obama spending binge would be accurate.

Yet the actual record doesn’t show a reckless increase in spending. Far from it.

Before Obama had even lifted a finger, the CBO was already projecting that the federal deficit would rise to $1.2 trillion in fiscal 2009. The government actually spent less money in 2009 than it was projected to, but the deficit expanded to $1.4 trillion because revenue from taxes fell much further than expected, due to the weak economy and the emergency tax cuts that were part of the stimulus bill.

The projected deficit for the 2010-13 period has grown from an expected $1.7 trillion in January 2009 to $4.4 trillion today. Lower-than-forecast revenue accounts for 73% of the $2.7 trillion increase in the expected deficit. That’s assuming that the Bush and Obama tax cuts are repealed completely.

When Obama took the oath of office, the $789 billion bank bailout had already been approved. Federal spending on unemployment benefits, food stamps and Medicare was already surging to meet the dire unemployment crisis that was well underway.

Obama is not responsible for that increase, though he is responsible (along with the Congress) for about $140 billion in extra spending in the 2009 fiscal year from the stimulus bill, from the expansion of the children’s health-care program and from other appropriations bills passed in the spring of 2009.

If we attribute that $140 billion in stimulus to Obama and not to Bush, we find that spending under Obama grew by about $200 billion over four years, amounting to a 1.4% annualized increase.

After adjusting for inflation, spending under Obama is falling at a 1.4% annual pace — the first decline in real spending since the early 1970s, when Richard Nixon was retreating from the quagmire in Vietnam.

In per capita terms, real spending will drop by nearly 5% from $11,450 per person in 2009 to $10,900 in 2013 (measured in 2009 dollars).

By the way, real government spending rose 12.3% a year in Hoover’s four years. Now there was a guy who knew how to attack a depression by spending government money!

Rex Nutting is a columnist and MarketWatch's international commentary editor, based in Washington.

http://www.marketwatch.com/story/obama-spending-binge-never-happened-2012-05-22?pagenumber=1

 

Talk about rewriting history. Bush submitted a $3.1T budget, and Obama took office and threw it out in favor of his own $3.6T one.


http://www.washingtonpost.com/wp-dyn/content/article/2008/02/04/AR2008020400493.html

President Bush yesterday unveiled a $3.1 trillion budget plan for fiscal 2009 that will leave deficits of more than $400 billion this year and next, forcing his successor to grapple with a range of unpalatable choices to close the gap, according to lawmakers and budget experts.

http://www.reuters.com/article/2009/02/26/us-obama-budget-idUSTRE51O6JA20090226

An eye-popping $1.75 trillion deficit for the 2009 fiscal year underlined the heavy blow the deep recession has dealt to the country's finances as Obama unveiled his first budget. That is the highest ever in dollar terms, and amounts to a 12.3 percent share of the economy -- the largest since 1945. In 2010, the deficit would dip to a still-huge $1.17 trillion, Obama predicted.

 

Here's how it went down:

http://www.powerlineblog.com/archives/2012/05/barack-obama-fiscal-conservative.php

It started with the ridiculous column by one Rex Nutting that I dismantled last night. Nutting claims that the “Obama spending binge never happened.” He says Obama has presided over the slowest growth in federal spending in modern history. Nutting achieves this counter-intuitive feat by simply omitting the first year of the Obama administration, FY 2009, when federal spending jumped $535 billion, a massive increase that has been sustained and built upon in the succeeding years. Nutting blithely attributes this FY 2009 spending to President Bush, even though 1) Obama was president for more than two-thirds of FY 2009; 2) the Democratic Congress never submitted a budget to President Bush for FY 2009, instead waiting until after Obama was inaugurated; 3) Obama signed the FY 2009 budget in March of that year; 4) Obama and the Democratic Congress spent more than $400 billion more in FY 2009 than Bush had requested in his budget proposal, which was submitted in early 2008; and 5) the stimulus bill, which ballooned FY 2009 spending, was, as we all know, enacted by the Democratic Congress and signed into law by President Obama. So for Nutting to use FY 2010 as the first year of the Obama administration for fiscal purposes was absurd. Moreover, it was largely because of the incredible explosion in federal spending in the first year of the Obama administration that the Tea Party movement sprang up, the GOP swept the 2010 elections, and federal spending has been relatively stable (although not declining, of course) since then.

 

$trillion+ deficits

 

The first three things Obama did in office:
1) Asked for the 2nd half of the $700B TARP money so he could spend it (on GM, among other things)
2) Asked for and got the democrats to pass a $800B "emergency" stimulus bill
3) Increased the budget from $3.1T to $3.6T.

A year later, he spent an additional $1.6T a year on health care. The credit card bills for that one haven't hit us yet.

Meanwhile, the Fed printed over $2T in new money and spent that on Obama's behalf. This shows up on the Fed's balance sheet, not in the govt. expenditures. Awesome slight of hand. Only fools are fooled by it, though.

Redact all that and you get jlprk's version of history.

But nah, he didn't spend like a drunken sailor! And that's an insult to drunken sailors, since they stop spending when their wallets are empty.

To give him credit for not continuing to increase govt. spending even further than (far beyond) our means is laughable.

 

You seem to understand math.

It wasn't all in the first year. Bush left him a deficit of $400B, and the deficits are now $1.3T and upward.

If you insist on adding 1/2 TARP (which was spent before Bush left office), it'd be a $750B deficit. And there's a HUGE difference between a one-time TARP expense adding to the deficit one year and the habitual and perpetual $1T per year higher spending directly attributable to Obama.

End of story.

 

Absolutely wrong. Deficits are the current result of current over-spending.