Numbers don’t lie: Huge deficit not Obama’s fault
Robyn Blumner
President Barack Obama’s budget has about as much chance of passing the Republican-controlled House as a proclamation applauding J.C. Penney for standing by Ellen. Since the White House unveiled the budget last week, Obama’s political opponents have been lining up to denounce the plan that projects a $901 billion deficit for fiscal year 2013.
House Budget Committee Chairman Paul Ryan declared that “instead of an America built to last, this is a plan for an America drowning in debt.” Presidential hopeful Mitt Romney called it “an insult to the American taxpayer.” Romney was thinking of himself here since Obama is proposing the “Buffett Rule” that would double Romney’s tax rate from the unjust 15 percent he gets away with, to 30 percent. You can understand the hurt feelings.
All this mud is getting thrown at the president’s fiscal stewardship, and yet it was the last Republican president who teed up the current challenges. From the date that President George W. Bush took office in 2001 until he left in 2009, he took the surplus-rich federal budget handed to him by President Bill Clinton and turned it into a debt-bloated monster, adding $5 trillion to the national debt, nearly doubling it at the time.
When Obama took office, Bush handed him an economy in ruins that was disgorging 500,000 jobs per month, as well as a government that could not live within its means.
By examining this year’s budget deficit of a little over $1 trillion, it becomes instantly clear that very little can be blamed on any conceivable Obama “spending spree.” The numbers are far more reflective of the hand he’d been dealt.
Michael Linden, the director of tax and budget policy at the Center for American Progress, broke down the numbers. He looked back five years to Jan. 2007. At that time, the Congressional Budget Office forecast that the federal government would run a “surplus” of $170 billion in 2012.
But then something happened. By the time Obama took office in Jan. 2009, the CBO had changed its tune and was projecting a deficit of $264 billion in 2012. What intervened was the Great Recession, brought on by Wall Street’s recklessness and years of free market “regulators” looking the other way.
Spending also increased in 2007 and 2008 primarily for the wars in Afghanistan and Iraq that Bush refused to pay for. All told, Linden finds that 35 percent of the differential between the CBO’s 2007 estimates and the reality of 2012 was caused by events that preceded Obama’s term.
The rest of the story – fully 48 percent of the differential – is one of sharply reduced revenues. When Obama moved into the White House in January 2009, the CBO was projecting 2012 revenues at $3.1 trillion. Now the CBO says this year’s revenues will be just $2.5 trillion, a loss of nearly $600 billion. Yes, the prolonged economic troubles are part of the equation, but approximately $335 billion is due to the extension of the Bush tax cuts.
Of what remains, only 9 percent is attributable to higher-than-expected nondefense spending. Linden says most of that is recession-related, including the last of the stimulus dollars and extra demands on federal unemployment benefits.
What this proves is that Obama’s new domestic spending is not driving up the country’s deficit. Blame the wars and lack of revenues, policies written in stone before Obama took office. Had the Bush tax cuts never gone into effect, the national debt would be about $3 trillion lower than the $15 trillion that it is now.
Obama’s critics are attacking him because he failed to meet his early promise to cut the deficit in half by the end of his first term. These are the same folks who hamstrung the president’s efforts by refusing to increase revenues, even by closing tax loopholes for oil companies. And let us not forget these immortal words from Bush in a February 2001 joint session of Congress: “I hope you will join me to pay down $2 trillion in debt during the next 10 years. … That is more debt repaid more quickly than has ever been repaid by any nation at any time in history.”
Oops.
(You can respond to Robyn’s column at blumner@sptimes.com.)
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