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The Obama Administration seems to be quite happy over this MarketWatch story in which it is claimed the Obama budget expansion never happened.
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.
NPR reports that Obama campaign officials are delighted. The problem is, the article uses data that has been unduly influenced by one-off events, and charges the 2009 impact of the Obama stimulus to the Bush Administration.
There’s little doubt that Bush’s 2nd administration spent more than otherwise expected, but it’s worth noting that the numbers rose dramatically in that last year.
The first thing to know is that when we say FY2009 — which the MarketWatch writer charges to the Bush Administration — it measures spending for the dates 10/1/2008 to 9/30/2009. Obama’s stimulus package added $185 billion to the FY 2009 deficit, all of which the writer is assigning to Bush.
TARP added $368 billion to the deficit in 2009 that did not happen in 2010. Jed Graham wrote in 2010 that the Obama Administration had overstated the cost of TARP by $100 billion, which also then gets charged to the Bush Administration by the MarketWatch piece. And TARP in general put all of its costs in 2009 then adds revenue as loans are repaid and assets sold off later on. TARP distorts the data used in the story. These data are from CBO, in billions.
FY 2005 $2,472.0
FY 2006 $2,655.1 (+7.4%)
FY 2007 $2,728.7 (+2.8%)
FY 2008 $2,982.6 (+9.3%)
FY 2009 $3,518.2 (+18.0%)
The MarketWatch story assigns the spending on stimulus correctly to Obama, but leaves the TARP on Bush, while crediting Obama for recovery of assets from TARP loans and asset sales.
Thus the story uses a distortion of the data caused by a temporary large spending program to tell a story that just ain’t so. If you’re going to charge Bush for TARP, you have to put back the repayment of TARP to Bush’s credit, which the MarketWatch story fails to do. This will not be an easy story for the Romney campaign to tell, in my view. Far simpler it is to say: “The Bush Administration chose to create a one-time loan program that expected repayment of TARP funds. The Obama Administration has continued instead to keep spending at that elevated level in the names of stimulus and Solyndra, something the Bush Administration would never have done. Had they had a third term, the number would properly have been negative as TARP was repaid and debt retired, something a Romney Administration intends to do.” I’m sure Peter or Rob or James could make this sing.