Big Spenders, All

By Frank Hagan | Related entries in Politics

The deficit explosion under the Obama administration is a common complaint by fiscal conservatives, and is often represented with a graph such as this one, courtesy of the libertarian think-tank, Cato.org:

Deficits under obama

However, as Cato points out, the fiscal year starts in October of each year, and the budget for 2009 was signed into law by President Bush. So while I tire of the Obama administration lamenting that they inherited most of their problems, on the deficit front at least, they are right:

Obama deficits

Profligate spending by Republicans led to losing majorities in 2006, and the subsequent spending under President Bush and a Democratic Congress proved even worse. So while there’s plenty of blame to go around, the one actor currently on stage that can’t be blamed for the deficit is the Obama administration. Next year, maybe, but not this year.

Cross posted to FrankHagan.com


This entry was posted on Thursday, November 19th, 2009 and is filed under Politics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

17 Responses to “Big Spenders, All”

  1. frankhagan.com » Big Spenders, All Says:

    [...] Cross posted to Donklephant.com [...]

  2. kranky kritter Says:

    I wish more folks were intelligent and fair-minded enough to look at government overspending without spinning it through a partisan lens, Frank.

    Any sensible person who looks at government spending objectively can’t miss the fact that the vast majority of folks from both parties don’t seem concerned with spending in a fiscally responsible way. It’s beyond tedious that most democratic defenders blame all the problems on Bush and most GOP defenders point the finger at democrats. They’re both right, because both parties are responsible for irresponsible spending.

    But right now, blame is irrelevant. What matters is to take responsibility for fixing it by changing pour ways. And I’m even willing to agree that the overspending of the last 2 budgets may have been necessary to mitigate the pain of 2007-8 market collapse. Arguably, those actions prevent even worse outcomes, even if it’s at the expense of extending the time it takes for us to recover.

    The important thing is that we need to get back within shouting distance of balance within the next 2 budget cycles. To make it it understandable for folks, I’ve been explaining it by saying that for the last 2 budgets, we’ve been collecting 3 while spending between 4 and 5. That’s both extremely bad and unsustainable. We need to get back to collecting a dollar and spending no more than like $1.05. And quickly.

    I am going to guess that the democrats, while still strongly in charge, are going to be willing to do no better than to get the deficit down to around collecting 3 while spending a little more than 4. IMO this is insufficient, but I expect it to accompanied by a big back-patting party as the admin spins itself as sternly responsible about spending.

    Ultimately, America will find ourselves sooner or later in a spot where we’ll have little choice but to do as our creditors strongly suggest. The extra dollars are already out there in the form of debt. And America is trying to delay the rise of interest rates that must follow for as long as possible. But it’s going to come.

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  4. Chris Says:

    shocking. so when we tell people that he inherited the budget, we are right?

  5. Michael Says:

    very good point, Frank.

  6. Frank Hagan Says:

    In large part, the Obama administration inherited the budget. But they inherited it from a Democratic congress and a lame duck Republican (but big spender) President. The Democrats were in power in the House and Senate since 2006, so the budget increases since then are due to the legislative priorities of the Democrats.

  7. JMG Says:

    Frank,

    Don’t be ridiculous. The major budget-busting acts under George Bush were:
    -Across the board tax cuts
    -An increase in entitlement spending with Medicare Part D
    -Two simultaneous foreign wars

    The Democratic control of Congress came about long after these policies were made into law. To state “budget increases since then are due to the legislative priorities of the Democrats” is just wrong. The spending we’re now in, is a result of the Bush Admin and the six consecutive Republican Congresses’ that accompanied. They are all forms of long-term non-discretionary spending that aren’t subject to the discretionary power of a yearly Congressional budget. Even if they had the political ability too, the ’06 and ’07 Dem Congresses didn’t have any control over the non-discretionary aspects of the budget without fully changing the law.

  8. Frank Hagan Says:

    JMG, you are right that Bush and the Republican congress spent money we didn’t have, and you identify three of the items they spent on. But don’t forget the creation and expansion of other programs, such as No Child Left Behind. So you can argue that the Democrats having power in Congress since 2006 has had no effect, and I’m willing to concede they didn’t do much in those years.

    But its not true that they didn’t try their hardest to spend more. Even big spender Bush thought they were going too far, and vetoed several bills. They overrode them.

    Bush issued 12 vetos in his last few years, with a couple for social conservative reasons (stem cell research funding) and “security” reasons that had no impact on spending (mostly relating to the wars).

    The SCHIP bill was vetoed by Bush as a budget buster, and Congress could not override it; a “non-budget buster” extension of the law was eventually signed by Bush. But the higher spending, expansion of the program was passed as HR2 in 2009, and was signed into law by President Obama, one of his first acts. The Congress also overrode Bush’s veto of the Water Resources Act, the Farm Bill of 2007, and the Medicare Improvements for Patients and Providers Act after 2006, so those costs are squarely in the “D” column.

    The facts speak for themselves; both parties are irresponsible, big spenders.

  9. Chris Says:

    IIRC, Bush only veteod when the demos were in control of congress.

  10. Mike Says:

    I’ve seen these charts before and it is true that they are somewhat deceptive because 2009 is actually partially 2008.

    With regards to “whose to blame for the deficit?”, I agree with kk that the most important thing is “how do we fix it?” But with that said, I’m going to weigh in on the first question anyway.

    Most people, except for the far right wing, will accept the fact that during a recession, the deficit will be higher, both because of lower tax receipts as well as higher spending for social programs. So, with that in mind, one fair thing to do would be to ignore the numbers during a recession since they aren’t an accurate reflection of the administrations true deficit-related intentions. So let’s remove 2008-2012 or so from the graphs. What do we have left?

    The deficit numbers post 2012 are approximately twice the numbers from pre-2008. So even with all of Bush’s programs that have been described above, including the wars (which I understand are included in the graphs), Obama’s non-recession budget is still twice as high.

    And also Frank makes a good point that Democrats were in control of Congress since 2007.

    Add to all of this the fact that Obama promised to cut the deficit in half. What does he use as the baseline? Of course he uses 2009 numbers, which is clearly an outlier year. Obama has proven to be just as willing, if not more, to use accounting tricks as his predecessor.

  11. DonkeyBidness Says:

    The health care bill is supposed to pay for itself. No its supposed to acutally reduce the budget.

    The problem.

    Taxes begin in 2010 to pay for this health care. The health care reform itself does not begin till 2014. So in effect we have 4 years worth of tax receipts before the health care reform even goes into effect.

    In addition no one really knows…honestly…do we really believe that we can cut 500 billion from medicare when our politicians dont have the political will to even reduce doctor payments by 5-6 percent per year.

    So taking into account the various accounting tricks the democrats are using on this health care fiasco. We are actually looking at increasing the budget deficit by around 2.5 trillion dollars from 2014-2024.

    Thats a rosey projection. We are incapable as a nation of balancing the budget. We as a nation believe that money grows on trees and that we should not balance the budget because someone…some group will be distressed by such an inconvienient truth as “Money does not grow on trees.”

    So in the end. After 4 or 8 years of Obama we will have a 25 trillion dollar national debt and then the democrats will blame the Republicans for it all because….well they will find some reason to blame the republicans. But by golly we will have cheap health care. Even though our taxes will be murderous.

    Wait…we cannot tax the people too hard because that will be inconvinient for the rich…so we will…..what? What will we do when it comes to the real crunch time?

    Just like California right now has run out of options. There comes a time folks when we as a nation will be out of options.

    We can all believe that “The Iraqis will throw down their arms and embrace us as liberators” just like “we believe that this healthcare fiasco will reduce the deficit.”

    We can all subscribe to our parties Bullshit…or we can face the truth….

    America’s running out of money.

  12. Nick Benjamin Says:

    Obama is slightly better on the deficit than Bush.

    He supports more honest accounting (S. 1776), put the wars on-budget, and has paid for everything he’s proposed except the stimulus. And the stimulus was supposed to be a one-time deal.

    OTOH Dubya didn’t pay for any of his programs, including one that cost more than the health Senate bill, and liked to pretend occupying a country for years was a one time expense.

    So basically we traded a guy who couldn’t count for a politician.

  13. Mike Says:

    “Obama is slightly better on the deficit than Bush.”

    Even after factoring in Bush’s wars (the chart’s above account for them, despite the fact that his budgets didn’t), Obama’s post-2012 deficit is still projected to be twice as high as Bush’s pre-2008 benefits. How can that possibly be defined as “better”?

    As for honesty in counting, how do you respond to the fact that Obama promises to cut the deficit in half, but using 2009 numbers as the baseline despite the fact that it clearly an outlier year? It seems to me that is at least as shady as Bush’s questionable accounting.

  14. Nick Benjamin Says:

    Partly it’s because I expect politicians to always be slightly dishonest, but never outright lie. IMO Dubya’s official budgets were lies. He knew perfectly well he had Trillion$ in spending off-budget, but it looked bad so made everyone ignore it. Note that if you tried this as a CEO you’d be guilty of a felony. By comparison Obama intentionally setting the bar low is not exactly a major sin.

    Partly I’m betting that the economy has hit bottom, and the historical pattern re-emerges. When things are bad official projections are always way too pessimistic. I hope it’s already turned around. But even if it hasn’t I assume it will turn around sometime in the next few years, and when it does the deficits are likely to be a lot smaller than projected.

    More to the point I’m assuming almost all this spending is stuff Bush got through but didn’t pay for. That’s because the only policy Obama got through without paying for was the stimulus, which is cheaper than most of Bush’s debt-funded programs, and is not likely to be repeated every year for most of a Decade as the wars have been.

    And partly I’m giving Obama credit for the health reforms that are so close to passing. If the CBO is right about these projections it makes sense to trust it when it says the Senate health bill will knock early $800 Billion off the deficit in the next 20 years. Most of which is apparently towards the end, and does not appear on Cato’s chart.

  15. Mike Says:

    “Partly it’s because I expect politicians to always be slightly dishonest, but never outright lie.”

    I don’t see much difference. No one was being deceived by Bush’s budget. The emergency war spending bills were not passed in secret. It was not a lie, it was a shady accounting trick, just like Obama’s “cut-the-deficit-in-half” trick.

    “Partly I’m betting that the economy has hit bottom, and the historical pattern re-emerges.”

    The CBO analysis assumes the economy will recover. In fact, if I remember correctly, the analysis was made at a time that most people thought it would recover faster than they do now (see, for example, the estimates regarding unemployment rates at the time the stimulus was passed).

    “More to the point I’m assuming almost all this spending is stuff Bush got through but didn’t pay for.”

    The Bush tax cuts were paid for toward the beginning of his term, and the war spending is declining. But I’m open to this argument if you can provide specifics. I too am baffled by what could possibly be in those numbers, but something is and I don’t see any reason to believe it is Bush.

    “And partly I’m giving Obama credit for the health reforms that are so close to passing. ”

    The $800 billion number is very uncertain as the CBO takes great pains to point out. In any case, that amounts to $40 billion per year which still puts Obama’s deficit higher than Bush’s even if that number is realized.

  16. Mike Says:

    My response is in moderation, but I mistyped one thing:

    “The Bush tax cuts were *passed* toward the beginning of his term”

  17. Rachel Says:

    Sorry, the blame bush meme died when Obama offered himself as president — esp Nov 4, 2008

    Also, the Dems spending as well as W’s bailout plans did increase the deficit, which the Congress dominated Dems did not stop.

    Obama’s got to own it sometime, folks. Your blantant rationalizations does not reflect in the recent Gallop polls which show O under 50% and he’s not finished his first year. And I can guar-on-tee that with the health care act will make W look like Scrooge.

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