An Obama deficit thanks to Bush

President Barack Obama's budget has about as much chance of passing the Republican-controlled House as a proclamation applauding JCPenney for standing by Ellen. Since its unveiling, Obama's political opponents have been lining up to denounce the plan that projects a $901 billion deficit for fiscal year 2013.

House Budget Committee chairman Paul Ryan declared that "instead of an America built to last, this is a plan for an America drowning in debt." Presidential candidate Mitt Romney called it "an insult to the American taxpayer." Romney was thinking of himself here since Obama is proposing the "Buffett Rule" that would double Romney's tax rate from the unjust 15 percent he gets away with now to 30 percent. You can understand the hurt feelings.

All this mud being thrown at the president's fiscal stewardship, and yet it was the last Republican president who teed up the current challenges. From the date President George W. Bush took office in 2001 until he left in 2009, Bush took a surplus-rich federal budget he had been handed by President Bill Clinton and turned it into a debt-bloated monster, adding $5 trillion to the national debt, nearly doubling it at the time.

When Obama took office, his gift from Bush was an economy in ruins, disgorging 500,000 jobs per month, and a government that could not live within its means.

By examining this year's budget deficit of a little over $1 trillion it becomes instantly clear that very little can be blamed on any conceivable Obama "spending spree." The numbers are far more reflective of the hand he'd been dealt.

Michael Linden, the director of tax and budget policy at the Center for American Progress, broke down the numbers. He looked back five years to January 2007. At that time, the Congressional Budget Office forecast that in 2012 the federal government would run a surplus of $170 billion.

But then something happened. By the time Obama took office in January 2009, the CBO had changed its tune and was projecting a deficit in 2012 of $264 billion. What intervened was the Great Recession, brought on by Wall Street's recklessness and years of free market "regulators" looking the other way.

Spending also increased in 2007 and 2008, primarily for the wars in Afghanistan and Iraq that Bush refused to pay for. All told, Linden finds that 35 percent of the differential between the CBO's 2007 estimates and the reality of 2012 was caused by events preceding the president's term.

The rest of the story — fully 48 percent of the differential — is one of sharply reduced revenues. In the month Obama came to office the CBO was projecting 2012 revenues at $3.1 trillion. Now the CBO says this year's revenues will be just $2.5 trillion, a loss of nearly $600 billion. Yes, the prolonged economic troubles are part of the equation, but more than $300 billion is due to the extension of the Bush tax cuts.

Of what remains, only 9 percent is attributable to higher-than-expected nondefense spending. Linden says most of that is recession-related, including the last of the stimulus dollars and extra demands on federal unemployment benefits.

What this demonstrates is that Obama's new domestic spending is not driving the country's deficits. Blame the wars and lack of revenues, policies written in stone before Obama took office. Had the Bush tax cuts never have gone into effect the national debt would be about $3 trillion lower than the $15 trillion it is now.

Obama's critics are attacking him because he failed to meet his early promise to cut the deficit in half by the end of his first term. These are the same folks who hamstrung the president's efforts by refusing to increase revenues, even by closing tax loopholes for oil companies. And let us not forget these immortal words from Bush in a February 2001 joint session of Congress: "I hope you will join me to pay down $2 trillion in debt during the next 10 years. … That is more debt, repaid more quickly than has ever been repaid by any nation at any time in history."

Oops.

An Obama deficit thanks to Bush 02/18/12 [Last modified: Saturday, February 18, 2012 3:30am]

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