White House vs. Fact Checkers: Sticking to Obama’s Fiscal Story

May 30, 2012 - 4:48 PM
Obama

White House Press Secretary Jay Carney speaks during his daily news briefing at the White House in Washington, Tuesday, May, 29, 2012. (AP Photo/Pablo Martinez Monsivais)

(CNSNews.com) – The Obama administration is holding firm to its heavily challenged assertion that federal spending has slowed during his tenure in office.

At a campaign earlier this month in Denver, Obama said, “Since I’ve been president, federal spending has risen at the lowest pace in nearly 60 years. Yes, we're going to streamline government. There's more waste to be cut.”

White House Press Secretary Jay Carney has repeatedly stood by the statement invoking a MarketWatch column, and on Wednesday, an assessment by Jared Bernstein, a former economic aide to Vice President Joe Biden.

CNSNews.com cited Obama’s own OMB numbers in a May 24 article to question the estimates. The Washington Post, in a May 25 article, gave the assertion “three Pinocchios,” while the Associated Press also criticized the administration’s fiscal assessment in a May 26 article. The Wall Street Journal weighed in on May 25 with an editorial, “History Boys: Obama’s fiscal blowout that never happened, according to Obama.”

However, Politifact, affiliated with the Tampa Tribune newspaper, rated the Obama claim, “mostly true.”

During the press briefing, Carney said, “I know the RNC [Republican National Committee] likes to put this stuff out and contest it, and they cited the size of the budget deficit in 2009, 2010 and 2011 and that they were the largest in history. Well of course they were, because what they will never tell you is that President Obama was handed on Jan. 20, 2009, the single largest budget deficit in history.”

CNSNews.com later said that it was not just the RNC, but other independent fact check organizations raised questions about the matter. 

“What I was pointing to is an assessment made by Jared Bernstein, an economist that used to work with me in the vice president’s office,” Carney told CNSNews.com. “He allowed where there were some issues that you could disagree on the numbers. But even if you did that, the fact is that aggregate federal spending was greater under George W. Bush, greater under George H.W. Bush, greater under President Ronald Reagan. That’s just a fact.

“It is hard to accept, I know, that the conventional wisdom about profligacy and irresponsible budget management turns out to be wrong, but it is, and that’s why I think it is clarifying to see these assessments made,” he said.

“It is clarifying to remember an exercise that I’ve undertaken to look at the size of the federal government under different presidents, look at the size of the increase in the public workforce under different presidents, how they compare over the years. I think all of these are very edifying instead of just retreating to tired old conventional wisdom that actually don’t bear out in the modern era,” Carney added.

The federal government has spent $5 trillion in debt in the first three years of the Obama administration, compiling more debt than eight years of President George W. Bush.

According to the historical tables of the White House Office of Management and Budget, these are three of the only four fiscal years since the Japanese surrendered on Sept. 2, 1945, that the federal government has spent more than 24 percent of GDP. (See Earlier Story)

The fourth fiscal year since the end of World War II in which the federal government spent more than 24 percent of GDP was 2009. That fiscal year started when George W. Bush was president and ended when Obama was president.

On the first day of fiscal 2009 – which was Oct. 1, 2008 – then Sen. Obama voted for the $700-billion Troubled Asset Relief Program (TARP). On Feb. 17 2009, after he became president and while his party controlled both houses of Congress, Obama signed a stimulus bill that the Congressional Budget Office has determined had a 10-year price tag of $831-billion.

In fiscal 2008, the federal government had spent 20.8 percent of GDP. But in fiscal 2009, after TARP, and the stimulus, the federal government spent 25.2 percent of GDP – an increase of 21.2 percent from the year before. In the years after fiscal 2009, during the Obama presidency, annual federal spending has not dropped below 24 percent of GDP.

In The Washington Post May 25 assessment of the White House assertion, the paper said, “In the post-war era, federal spending as a percentage of the U.S. economy has hovered around 20 percent, give or take a couple of percentage points,” the Post said. “Under Obama, it has hit highs not seen since the end of World War II — completely the opposite of the point asserted by Carney. Part of this, of course, is a consequence of the recession, but it is also the result of a sustained higher level of spending.

“Carney suggested the media were guilty of ‘sloth and laziness,’ but he might do better next time than cite an article he plucked off the Web, no matter how much it might advance his political interests,” the Post continued. “The data in the [MarketWatch] article are flawed, and the analysis lacks context — context that could easily could be found in the budget documents released by the White House.”

The AP reached a similar conclusion, stating, “Those are stunningly low figures considering that Obama rammed through Congress an $831 billion stimulus measure in early 2009 and presided over significant increases in annual spending by domestic agencies at the same time the cost of benefit programs like Social Security, Medicare and the Medicaid were ticking steadily higher. A fairer calculation would give Obama much of the responsibility for an almost 10 percent budget boost in 2009, then a 13 percent increase over 2010-2013, or average annual growth of spending of just more than 3 percent over that period.”

Carney cited PolitiFact that assessed the White House claim citing the MarketWatch column as “mostly true.” PolitiFact said the MarketWatch column was “pretty straightfoward, but any number of adjustments could be made to fine tune it. Deciding which of these tweaks to make and which to ignore isn’t a scientific process. It involves judgment calls about which reasonable people can disagree.”

PolitiFact continued, “First, the stimulus was not all spending; it was roughly one-third tax cuts, which wouldn't be attributed to either president in a spending chart. Second, the measurement we used was outlays, which refers to money actually spent during that fiscal year. Only a portion of the stimulus was spent in fiscal 2009. Finally, as we noted, [MarketWatch columnist Rex] Nutting did reassign $140 billion in 2009 spending from Bush to Obama.”

The Wall Street Journal said the White House assessment of its own fiscal responsibility is “like an alcoholic claiming that his rate of drinking has slowed because he had only 22 beers today and 25 beers yesterday.”

The editorial goes on to say, “Prior to Mr. Obama, the U.S. had not spent more than 23.5% of GDP—that was in 1983, amid the Reagan defense buildup—since the end of World War II. Yet Mr. Obama has managed to exceed that four years in a row: 25.2% in 2009, 24.1% in 2010 and 2011, and an estimated 24.3% in 2012, up from a range between 18%-21% from 1994-2008.”