About the idea that Obama’s spending has been tame
You’ve heard of lies, damned lies, and statistics? Well, here’s Exhibit A: a column at MarketWatch by Rex Nutting.
Nutting’s column, titled “Obama spending binge never happened,” has caused a lot of excitement among people who would like to believe it’s true. And the bottom-line numbers — which are as far as Nutting goes in his column — do show that total spending has risen more slowly between fiscal 2009 and fiscal 2013 than you might have otherwise believed. Annual federal spending growth during President Obama’s first term, Nutting’s numbers show, has been 1.4 percent. That would be slower than in any of the seven previous terms, dating to the beginning of the Reagan years. Going out of his way to be even-handed, Nutting even graciously attributes Obama’s “stimulus” spending in FY09 to Obama rather than to George W. Bush, under whom that fiscal year began.
What a guy!
But what Nutting’s surface-level “analysis” fails to acknowledge — aside from the fact that he’s giving Obama full credit for a level of spending that won’t even begin for four more months, making it a completely unknowable quantity — is the vast amount of spending that was supposed to be temporary but instead has been baked into Uncle Sam’s cake. Accounting for the temporary-turned-permanent gives us a truer depiction of the Obama’s (sorry to say it!) spending binge.
Let’s start with the appropriations bills Obama signed for FY09 other than the stimulus. The two major ones were the $105.9 billion supplemental defense bill and the $2.9 billion “cash for clunkers” bill. So that’s $108.8 billion that ought to be put on Obama’s ledger rather than Bush’s.
Now let’s take a deeper look at the stimulus spending Nutting attributes to Obama in FY09. Nutting puts it at $140 billion. The next year’s budget, which included the FY09 spending, instead pegged it at $202 billion with an estimated $30 billion in FY13; subsequent budgets have not broken out the spending specific to the American Recovery and Reinvestment Act (probably because the ARRA has been so amazingly popular and successful). Nutting doesn’t tell us where he gets that $140 billion figure, and so, to avoid mixing numbers, I’m going to stick with the figures from the FY10 budget. That’s $172 billion in “temporary” spending that, under The Most Fiscally Responsible President Evah, should have disappeared.
That’s not all. Spending in FY09 also included $151 billion for the bank bailout, or TARP, and the FY13 budget puts the figure at $12 billion. That’s another net $139 billion in “temporary” spending that should have gone away. Add that to the $172 billion from the stimulus, and we’re talking about $311 billion.
Now, to be truly fair to Obama, let’s make comparisons without including the costs of Medicare, Social Security and net interest. These are big-ticket items that are growing quickly on automatic pilot, and they couldn’t have been changed without a long national debate. So, here’s what we have:
FY09 spending: $3,518 billion
Less Medicare, Social Security and net interest: $2,218 billion
Less “temporary” TARP and stimulus spending: $1,907 billion
Less Obama’s supplemental spending for defense, clunkers: $1,798 billion
The equivalent figure in Obama’s FY13 budget is $2,418 billion, which would represent an annualized growth rate of 7.7 percent. That’s five and a half times faster than the rate with which Nutting credited Obama. Once we adjust Bush’s record to account for the $108.8 billion in Obama’s supplemental FY09 spending outlined above, it places his spending as the second-fastest out of the last eight presidential terms rather than the slowest, as Nutting claimed. (The rankings are the same even if we adjust for inflation.)
Where did Obama want to stick this extra money? In International Affairs ($22 billion, or 59 percent, higher than FY09), Transportation ($30 billion, or 36 percent), Education ($42.2 billion, or 53 percent), Health (not counting Medicare, $51.5 billion, or 15 percent), Energy ($9.2 billion, or 193 percent), to name a few of the largest examples.
However, Nutting did not use Obama’s FY13 budget as a comparison. Perhaps that’s fair, given that the president’s budget was defeated 99-0 in the Senate recently. In any case, Nutting instead used the Congressional Budget Office’s projected baseline, and this really is the coup de grace for his argument.
The CBO’s projected baseline gives us an equivalent FY13 figure of $1,968 billion, which in turn gives us an annualized growth rate of 2.3 percent, which is actually OK by recent historical standards. But what is the CBO’s projected baseline? It is the agency’s estimate of what revenues and spending will be if current law is kept in place. That is, it tells us what happens if the president and Congress do nothing. For this lack of action, Nutting wants to give Obama credit.
But wait, there’s more! Even if we use the CBO projections, it is worth noting the enormous difference between Obama’s first two years, when Democrats had huge majorities in Congress, and his third and fourth years, during which Republicans have controlled the House. The annualized growth rate in the first two years was 7.7 percent; since then it’s minus-2.9 percent.
So, to conclude:
We are supposed to ignore Obama’s budget proposal, which showed his spending rising faster than what’s typical for the past 30 years, and instead give him credit for a) not going beyond the baked-in spending he set in motion early in his term and b) the gridlock that came to Washington after Republicans took over the House?
Seriously?
You will not find conservatives lauding the George W. Bush years as a model of fiscal restraint, because they weren’t. But it is just as laughable for Nutting and his fellow travelers to try to make such a claim for Obama.
– By Kyle Wingfield
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324 comments Add your comment
JDW
May 25th, 2012
8:14 am
@Kyle…you are double dipping. Lets say your $311 billion number is right. You can reduce the baseline but you can’t reduce the baseline and then add the number to the next year. That’s double dipping. The numbers work out the same no matter which sheet I use.
Apples and Oranges
May 25th, 2012
8:38 am
I see there were a few conservative bloggers that have posted stories dismissing the fact that Clinton balanced the budget, I would gather that some of the right wing radio noise machine has been pushing that meme for awhile so as to not have their Presidents look like the prolific spenders that they are. Here is a non-partisan resource that refutes that assertion, I am happy to review a similar non-partisan source that supports the fact that Clinton never had a surplus.
http://www.factcheck.org/2008/02/the-budget-and-deficit-under-clinton/
Kyle Wingfield
May 25th, 2012
8:46 am
JDW: If we were comparing 2009 to 2010, you’d be right. But all we are trying to do is get the baseline right and then compare it to 2013, when that particular spending isn’t there any more.
md
May 25th, 2012
8:55 am
Clintons/our surplus was like me having 25k in my checking account…….yet my debt totals a couple million.
Perspective my dear Watson……….
Kyle Wingfield
May 25th, 2012
8:56 am
Humanist: It doesn’t take much of a wonk to look at a federal budget document with 40-50 lines. But if that’s the best counterargument you’ve got, don’t be surprised when people don’t find it credible.
Lil' Barry Bailout (Revised Downward)
May 25th, 2012
9:05 am
To paraphrase Jeff Foxworthy, if you think Obozo’s spending has been tame, you just might be a moron.
No matter how you measure it, by dollar amount, percent of GDP, size of the deficit, the conclusion is the same. Obozo’s spending is damaging the economy and is un-American.
Americans will deal with this disaster in November. Some Democrats will help.
Now with Ten Percent Fewer Calories
May 25th, 2012
9:15 am
I see Politifact has provided an analysis of those nasty spending habits and I see they have concluded that Obama and Eisenhower are by far the most frugal in the land.
Jack
May 25th, 2012
9:18 am
You better leave Miss Becky alone, Mr. Wingfield. She might suffer some kind of sinking spell.
Lil' Barry Bailout (Revised Downward)
May 25th, 2012
9:26 am
If you were confused and thought Politifact was non-partisan, their assessment of this issue should put that question to rest.
Kyle Wingfield
May 25th, 2012
9:30 am
Ten Percent: And, as I told Manny yesterday, Politifact is mostly correct, as far as it goes. The problem is that, like Nutting, it doesn’t go far enough (among other things: like Nutting, the Politifacters only added the stimulus to Obama’s ledger for FY09, not the supplemental spending bills I outlined in the OP).
It’s also worth noting that the claim Politifact checked is a slightly different one: “Mitt Romney is wrong to claim that spending under Obama has ‘accelerated at a pace without precedent in recent history,’ because it’s actually risen ’slower than at any time in nearly 60 years.’ ” That’s not the same claim that Nutting made, and which I’ve addressed here.
Apples and Oranges
May 25th, 2012
9:36 am
Lil’ Barry, would you be willing to share with us some of the non-partisan sources you rely upon when seeking information?
Nsnstv
May 25th, 2012
9:37 am
Fresh Price: because everyday people who are not african american think this guy is a buffoon.
Way to show your true colors.
JDW
May 25th, 2012
9:54 am
@Kyle…”JDW: If we were comparing 2009 to 2010, you’d be right. But all we are trying to do is get the baseline right and then compare it to 2013, when that particular spending isn’t there any more”
Correct…and when you do that the 2009 baseline using your sheet is $1,999,358. Projected 2013
is $2,294239. That equals raw growth of 14.75% over 4 years or 3.7% per year. That makes the first Obama term the second slowest growing term since 1980, trailing only Clinton’s first term.
The rest of the numbers using your sheet…
Reagan 1 29.72% Average 7.43%
Reagan 2 16.69% Average 4.17%
Bush 1 1 17.06% Average 4.26%
Clinton 1 4.79% Average 1.20%
Clinton 2 23.66% Average 5.91%
Bush 2 1 45.37% Average 11.34%
Bush 2 2 30.57% Average 7.64%
Obama 14.75% Average 3.69%
My orignal contention still holds…Obama/Clinton spend far less than Reagan/Bush.
Now with Ten Percent Fewer Calories
May 25th, 2012
9:58 am
Kyle,
Politifact applied a consistent methodology to all administrations that they evaluated and their end result appears to still support the claim that Obama, like Eisenhower, is more frugal than any president we have had for the last 60 years. “Mostly True” sounds pretty good to me. It beats Mittt’s “Pants on Fire” claim that spending under Obama has “accelerated at a pace without precedent in recent history,” by a long shot.
JDW
May 25th, 2012
10:00 am
BTW I also find it interesting that spending grows much faster in Clinton’s second term than it did in the first….after the much ballyhooed switch in Congressional majorities. That means that since 1980 the 2 Presidential terms that grew spending at the slowest rate had a Democratic President and Democratic Majorities for at least half the term.
Kind of points out the fallacy of Republican fiscal restraint now doesn’t it?
Kyle Wingfield
May 25th, 2012
10:02 am
Btw, the Washington Post’s fact-checker also examined Nutting’s numbers and found them lacking in much the same way I did.
Lil' Barry Bailout (Revised Downward)
May 25th, 2012
10:14 am
Apples and Oranges: Lil’ Barry, would you be willing to share with us some of the non-partisan sources you rely upon when seeking information?
——–
Certainly. TreasuryDirect.gov is a good one for spending and deficit numbers, and bls.gov for unemployment and jobs info. You must be new here to not have seen me link to these.
Tiberius - Banned from Bookman's and proud of it!
May 25th, 2012
10:16 am
The left’s (and sometimes right’s) inane ability to take one piece of a giant puzzle and call it complete is beyond compare.
You cannot use the term “frugal” and apply it to “rate of spending increase”. That is intellectually impossible.
It is frankly a shame that some of you people vote.
Lil' Barry Bailout (Revised Downward)
May 25th, 2012
10:18 am
Dear Moron:
In what way is spending $1.5 trillion more than you take in every year “frugal”?
Same question regarding spending 25% of GDP.
Kyle Wingfield
May 25th, 2012
10:20 am
JDW: Well, you’re doing something very different, because we can’t perform the same analysis and get such very different numbers.
As for Clinton’s second term: I noticed that, too. If you break it down by 2-year periods, you get:
1994-95: 0.8% annual growth
1996-97 (i.e., first GOP Congress): 0.9%
1998-99: 5.5%
2000-01: 6.2%
The biggest increases from period 2 to period 3 are Commerce and Housing Credit, 19.3% (almost all deposit insurance and mortgage credit…I told you eliminating this entire line item for all presidencies would skew the results!); Health, 19.2% (almost all “Health Care Services,” aka Medicaid); Agriculture, 15.6% (almost all subsidies).
md
May 25th, 2012
10:22 am
From Kyle’s link……but more than likely irrelevant to those that do not want to “see” it:
“One common way to measure federal spending is to compare it to the size of the overall U.S. economy. That at least puts the level into context, helping account for population growth, inflation and other factors that affect spending. Here’s what the White House’s own budget documents show about spending as a percentage of the U.S. economy (gross domestic product):
2008: 20.8 percent
2009: 25.2 percent
2010: 24.1 percent
2011: 24.1 percent
2012: 24.3 percent
2013: 23.3 percent
In the post-war era, federal spending as a percentage of the U.S. economy has hovered around 20 percent, give or take a couple of percentage points. Under Obama, it has hit highs not seen since the end of World War II — completely the opposite of the point asserted by Carney. Part of this, of course, is a consequence of the recession, but it is also the result of a sustained higher level of spending.”
JDW
May 25th, 2012
10:22 am
@Kyle…and Politifact rates the analysis mostly true…only mostly because they say Congress didn’t receive a mention. Not surprisingly I think the Post analysis is flawed. It is using different assumptions for the 2013 spending number which assume only half a fix. Net net I think that the CBO estimate used by Nutting will more likely be closer to the truth. As for the $140 billion number they mentioned…I used your $311 billion number and still came up with the second lowest increase since 1980.
In either case the story that Obama has spent at a rate unprecedented in history is total hogwash.
Lil' Barry Bailout (Revised Downward)
May 25th, 2012
10:26 am
Obozo is spending at rates not seen since WWII.
You’re a denier, JDW.
Kyle Wingfield
May 25th, 2012
10:28 am
JDW: And I never said “unprecedented in history.” Maybe Romney did, and if he did, he was wrong — arguably no more wrong than the typical political hyperbole (”most transparent administration in history” being one other example from some other guy running for president), but then pointing out hyperbole is one big reason the fact-checkers exist.
Btw, your line “Net net I think that the CBO estimate used by Nutting will more likely be closer to the truth” is one reason it’s silly to look at FY13 estimates. That fiscal year doesn’t begin for another four months! Why not just compare Obama’s annual average growth rate through FY12?
Hmmm…maybe because the CBO projected baseline for FY13 makes his numbers look better, albeit in a meaningless way?
Kyle Wingfield
May 25th, 2012
10:29 am
Also: As I pointed out, even the $311B number doesn’t cover everything. You also have to include the $108.8B in supplemental spending he signed.
Tiberius - Banned from Bookman's and proud of it!
May 25th, 2012
10:29 am
Kyle and JDW are simply arguing how many angels can dance on the head of a pin.
And JDW goes off the cliff with his last line: “In either case the story that Obama has spent at a rate unprecedented in history is total hogwash.”
Sorry, JDW, but when you’re responsible for $5 trillion in new debt in just three years (1/3rd of this nations total debt), your spending rate is, in fact, unprecedented.
Kyle Wingfield
May 25th, 2012
10:31 am
Sorry, Tib, but I disagree. This is important, because the reasons for the new debt are important. Conservatives say high spending; liberals say low taxes. To the degree tax revenues have been lower because more people are out of work, they are partially correct. But the other part of the equation informs us as to how much we should cut spending or raise tax rates.
So, this isn’t just meaningless budgetary theology.
Lil' Barry Bailout (Revised Downward)
May 25th, 2012
10:38 am
The libtards arguing this one remind me of the idiot I was debating a while back who was trying so awfully hard to argue that there really ARE 57 states.
Tiberius - Banned from Bookman's and proud of it!
May 25th, 2012
10:41 am
But you’re not talking budgetary theology, Kyle. At least not with JDW.
This is simple stuff. If you expect to take in X, spend X. Don’t spend X+anything. As that economist Peter – somebody says, “It’s really not that complicated!”
Lil' Barry Bailout (Revised Downward)
May 25th, 2012
10:45 am
Tib, it’s important to smack down the libtard nonsense like the above, as the Democrat sheeple are so unable to think critically. Left unchallenged, they’ll believe anything the Obozo campaign or media (oops, redundant) feed them.
md
May 25th, 2012
10:45 am
Here’s a fact for consumption…….adding 1.5T to the debt each and every year is heading in the wrong direction……I don’t care which “side” one wants to choose.
JDW
May 25th, 2012
10:49 am
@Kyle…”Well, you’re doing something very different, because we can’t perform the same analysis and get such very different numbers.”
It’s not rocket science…
Blank Lines 13,16,23,27,33,40,44,52,60,65,73,78,88,99,105,115
They are Totals or Subtotal lines and must be eliminated to sum the sheet without double counting
Blank Lines 48,49,53,54,91,92
They are off/on budget information lines that should not be in the total
Blank line 80 Medicare
Blank line 90 Social Security
Sum at line 116 eliminating 900 Net Interest, 920 Allowances and 950 Undistributed Receipts.
Subtract 311,000 from subtotal in 2009
JDW
May 25th, 2012
10:54 am
@Kyle…I agree that looking at 2013 projections is a forecasting exercise. If you want to do another analysis on Obama’s annual average growth rate through FY12 you could but then you have to adjust each year for the one time spending. The original $140 billion number you question is the amount of stimulus spending that actually occurred in 2009. The rest of it is spread throughout 2010 to 2012. To get at the first number without one time expenses you have to go to 2013.
JDW
May 25th, 2012
10:58 am
@Tiberius…”This is simple stuff. If you expect to take in X, spend X. Don’t spend X+anything. As that economist Peter – somebody says, “It’s really not that complicated!””
The root point of this whole exercise is that the biggest offenders to your philosophy since 1980 are Reagan, Bush and Bush…why you feel the need to give someone espousing the exact same policies another run is beyond me.
Kyle Wingfield
May 25th, 2012
10:59 am
JDW: That’s why I used the $311B number, which is net additional spending for TARP and the stimulus in FY09 vs. FY13 (projected).
Lil' Barry Bailout (Revised Downward)
May 25th, 2012
11:03 am
Reagan, Bush, and Bush never ran, much less proposed, Obozo-sized trillion-plus deficits.
Get a grip, denier.
JDW
May 25th, 2012
11:05 am
@Kyle…”This is important, because the reasons for the new debt are important. Conservatives say high spending; liberals say low taxes. To the degree tax revenues have been lower because more people are out of work, they are partially correct. But the other part of the equation informs us as to how much we should cut spending or raise tax rates. So, this isn’t just meaningless budgetary theology.”
I completely agree with that assessment of importance but not with this bit…”Conservatives say high spending; liberals say low taxes. ”
Fact is that parity was established during the Clinton years at +/- 20% of GDP. Today spending is in the 23% of GDP range and taxes are around 14.5%. It doesn’t take a genius to figure out that both have to move. By and large the Democrats understand and agree with that notion. However they are blocked at every turn by a Grover Norquist led bout of mass insanity among Republicans that can’t seem to understand that concept.
Kyle Wingfield
May 25th, 2012
11:12 am
Aha, I didn’t eliminate lines 920 or 950. Why did you?
Kyle Wingfield
May 25th, 2012
11:28 am
JDW: Fact is, that 20% of GDP in revenues has only been reached only three times in our history, and only once since the end of WW2. That would be 2000, at the peak of the tech bubble, when capital gains tax revenues peaked. What you didn’t mention is that spending when “parity was established during the Clinton years” was 19.1% of GDP (1998), 18.5% (1999) and 18.2% (2000).
Given those facts, I find it irresponsible to plan for revenues of 20% of GDP. And as this chart shows, this historical limit on revenues as a percentage of the economy has held true regardless of the top marginal income tax rate.
JDW
May 25th, 2012
11:31 am
920 has no data until 2012 and then it is an accrual of disaster funds and budget cap offsets…not likely to even happen but really has no effect.
950 is intergovernmental transfers and sale of assets. Basically revenue offsets that should be in collections not netted against expenses.
Kyle Wingfield
May 25th, 2012
11:34 am
JDW: Well, they must have a reason for listing it in spending rather than revenues.
JDW
May 25th, 2012
11:35 am
@Kyle…yes they do…to disguise spending.
JDW
May 25th, 2012
11:40 am
@Kyle…
A) I and many others don’t buy into Hauser’s Law. I don’t believe it works that way.
B) Clinton clearly proved that raising taxes had no dampening effect.
C) I said +/- 20% and is there somthing wrong with spending being less than revenues? We do have a debt to pay off. Demographically spending due to population age will be higher in the next 20 or so years and then the cycle will turn down.
D) If you want to talk irresponsible lets chat about revenues at 14% of GDP.
Kyle Wingfield
May 25th, 2012
11:55 am
JDW: Set spending at 18.5-19%, and we should be able to balance the budget over the course of the business cycle. Set it at 20%, and we will run a deficit 49 years out of 50. In fact, I would go so far as to say you could get a restoration of Clinton-era tax rates through Congress if it came with a spending cap of 18.5-19%.
And you know as well as I do that a) revenues came close to 15%, but never to 14%, and b) even that level is more a reflection of high unemployment rather than the rate. Revenues averaged 18% of GDP from 2005-08, i.e. under the current tax rates. Which is within about half a percentage point of the 50-year average.
Lil' Barry Bailout (Revised Downward)
May 25th, 2012
12:04 pm
You’re right about one thing, JDW. We should all be embarrassed that we’ve allowed the government to take 14% or more of all income earned by Americans.
It’s the spending, stupid.
JDW
May 25th, 2012
12:48 pm
@Kyle…”And you know as well as I do that a) revenues came close to 15%, but never to 14%, and b) even that level is more a reflection of high unemployment rather than the rate. Revenues averaged 18% of GDP from 2005-08, i.e. under the current tax rates. Which is within about half a percentage point of the 50-year average.”
I saw a 14.5% number somewhere but here are the numbers from the historical record.
Revenue as a % of GDP
1997 19.2
1998 19.9
1999 19.8
2000 20.6
2001 19.5
2002 17.6
2003 16.2
2004 16.1
2005 17.3
2006 18.2
2007 18.5
2008 17.6
2009 15.1
2010 15.1
2011 15.4
As you can see over the last three years it has been solidly in the 15’s. But to the important point, from 1997 to 2001 revenues averaged 19.8% of GDP. “Coincidentally” the aggregate budget surplus for those years is $53 billion dollars. That would be the only such surplus performance in the last 50 years.
From 2002 to 2007, after Duhbya’s folly, revenues averaged 17.4% of GDP and not surprisingly aggregate deficits amounted to $215 billion.
So I ask you which model should we pursue.
-The fifty year average that has never led to a balanced budget?
-The Duhbya path that clearly led us astray?
-The only one that has worked in the last 50 years…revenues and expenses at +/- 20%?
Lil' Barry Bailout (Revised Downward)
May 25th, 2012
12:51 pm
Yep, all we need for JDW’s plan to work is another Internet bubble economy.
Oh, and thanks for showing how Our President Bush’s 2003 tax cuts increased revenue!
JDW
May 25th, 2012
12:56 pm
BTW…”In fact, I would go so far as to say you could get a restoration of Clinton-era tax rates through Congress if it came with a spending cap of 18.5-19%.”
Are you telling Grover?
JDW
May 25th, 2012
1:17 pm
@LBB…”Oh, and thanks for showing how Our President Bush’s 2003 tax cuts increased revenue!”
You mean after he reduced it?
Lil' Barry Bailout (Revised Downward)
May 25th, 2012
1:31 pm
The dot-bomb bubble burst reduced it. Our President Bush fixed it with his revenue-increasing, unemployment-reducing tax cuts.
Too bad Dodd and Frank insisted on “rolling the dice” and the housing market melted down. Our President Bush had to fix that, too.