I hit this 60 Minutes quote two days ago in yesterday’s OOTD, but it’s worth revisiting in the form of Glenn Kessler’s fact check at the Washington Post. Kessler misses one of the biggest problems with Barack Obama’s response to Steve Kroft’s question, which was about national debt, and Obama responded by talking about deficits — two different issues, although related. I’ll put the question and the longer answer provided by Kessler together, emphases mine:
KROFT: The national debt has gone up sixty percent in — in the four years that you’ve been in office.
OBAMA: Well, first — first of all, Steve, I think it’s important to understand the context here. When I came into office, I inherited the biggest deficit in our history. And over the last four years, the deficit has gone up, but ninety percent of that is as a consequence of two wars that weren’t paid for, as a consequence of tax cuts that weren’t paid for, a prescription drug plan that was not paid for, and then the worst economic crisis since the Great Depression. Now we took some emergency actions, but that accounts for about 10 percent of this increase in the deficit, and we have actually seen the federal government grow at a slower pace than at any time since Dwight Eisenhower, in fact, substantially lower than the federal government grew under either Ronald Reagan or George Bush.
Now, if the deficit goes up, the solution would be to either spend less or tax more. Obama has done neither in any of his budget proposals, and as I wrote yesterday, his last two budget proposals would have made the situation worse — which is why even his own party gave neither of them so much as one supporter in three floor votes. Furthermore, the FY2009 budget in place when Obama took office was the creation of the Democrat-controlled House and Senate from the year before, and it was signed into law by Obama in March 2009, not Bush, after Nancy Pelosi and Harry Reid played keep-away in the fall of 2008. Barack Obama was part of that effort as a member of the Senate.
Kessler skips over these points to address Obama’s argument that the structural deficit is 90% George Bush’s problem. Kessler says it’s the other way around — that Bush policies account for about 10% of the current annual structural budget deficit, and the rest is evenly split between bad projections from the CBO and Obama’s spending and economic policies:
As can be seen above, CBO’s errors in forecasting played a large role in the demise of the projected surpluses. CBO had kept counting on a gusher of capital gains revenue — and then obviously failed to predict the recession of 2008.
But Obama’s policies also played a big role during his presidency. Using the CBO data for the years 2009-2011, here’s a very rough calculation of the contribution to the deficit. To keep things simple, we did not try to allocate interest expense, and we did not include categories of spending or taxes that were difficult to allocate.
The 2009 fiscal year is especially hard because that budget year is so much of an amalgam of Bush and Obama policies; we essentially split the cost of the Troubled Asset Relief Program between the two of them. Since this is not intended to be exact, but illustrative, we have rounded numbers and percentages:
- Economic/technical differences: $570 billion (46 percent)
- Bush policies: $330 billion (27 percent)
- Obama policies: $325 billion (27 percent)
- Economic/technical: $815 billion (51 percent)
- Bush: $225 billion (14 percent)
- Obama: $565 billion (35 percent)
- Economic/technical: $720 billion (46 percent)
- Bush: $160 billion (10 percent)
- Obama: $685 billion (44 percent)
Clearly, a huge part of the deficit problem — about half — stems from the recession and forecasting errors. But Obama’s policies represent a big chunk as well.
So how many Pinocchios does Obama get? One hundred percent of them:
Obama certainly inherited an economic mess, and that accounts for a large part of the deficit. But Obama pushed for spending increases and tax cuts that also have contributed in important ways to the nation’s fiscal deterioration. He certainly could argue that these were necessary and important steps to take, but he can’t blithely suggest that 90 percent of the current deficit “is as a consequence” of his predecessor’s policies — and not his own.
As for the citing of the discredited MarketWatch column, we have repeatedly urged the administration to rely on estimates from official government agencies, such as the White House budget office. It is astonishing to see the president repeat this faulty claim once again, as if it were an established fact. Four Pinocchios[.]
And as Kessler points out, the real structural bomb to annual deficits has yet to be triggered. ObamaCare may be deficit neutral in its first ten years — which is still arguable, and based on a fiscal shell game — but after that, “all bets are off.”