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Obama bungled his spending numbers

The statement

The debt ceiling deal will result in "the lowest level of annual domestic spending since Dwight Eisenhower was president."

President Barack Obama, in remarks Sunday from the White House

The ruling

Domestic discretionary spending is generally defined as spending that (a) is not defense- or security-related, (b) is appropriated by Congress rather than being set by a formula (which is how funding for Medicare, Medicaid and Social Security is determined) and (c) is not used to pay interest on the debt.

So taking Obama literally, he would be referring not just to domestic discretionary spending, but domestic mandatory spending as well, including Medicare, Medicaid and Social Security.

We didn't think that's what he meant to say — and the White House confirmed it was not — but at PolitiFact, words matter, so we'll calculate the numbers both ways.

Using the more traditional definition — that is, nondefense discretionary spending, excluding domestic mandatory spending — Obama is on solid ground.

The Office of Management and Budget has a historical table that shows since 1962, nondefense discretionary spending has ranged from between about 3.2 percent of GDP and 5.2 percent of GDP. So the question is whether the debt deal will lower domestic discretionary spending below 3.2 percent of GDP.

It does, according to Congressional Budget Office figures. We found that nondefense discretionary spending starts as 3.6 percent of GDP in 2012, then would fall to 3.1 percent by 2014 and 2.5 percent by 2021.

So, starting in 2014, non-defense discretionary spending is to fall below the 1962 level.

Using this measurement, then, Obama is correct.

But using a strict definition of Obama's words, the numbers would have to include Social Security, Medicare and Medicaid — and by this standard, he is wrong.

Those programs currently account for roughly 13 percent to 14 percent of GDP — several times the share allocated to nondefense discretionary spending. The combination of these two percentages will be bigger — even under the deal — than in many of the years since 1962.

On balance, we rate his statement Half True.

This ruling has been edited for print. Read the full version at PolitiFact.com.

Obama bungled his spending numbers 08/04/11 [Last modified: Thursday, August 4, 2011 9:18pm]
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