Bush’s Huge Budget Numbers Blamed on Obama
Leftist political humorist Calvin Trillin once noted, “sooner or later, every president makes you nostalgic for his predecessor.” Now, halfway through Obama’s term, it looks like the conservative pundits are happy to help this process along as best they can.
One such tactic they’re using these days is to blame Obama for some of the massive increases in federal spending that occurred during the eight years of Bush’s two terms. A Google search for “federal spending under Obama” and related terms yields a wide variety of articles and media stories (largely from Foxnews) blaming Obama for the massive spending increases that occurred during the 2009 fiscal year.
This is very clever of course, since few people out in the public understand how federal budgeting works, but the fact is that the spending that occurred during the 2009 fiscal year is almost totally the result of appropriations bills signed by George W. Bush during the 2008 calendar year. By shifting Bush’s 2009 spending to Obama, one can then understate the amount of federal spending authorized by Bush while inflating the spending authorized by Obama. This then helps perpetuate the myth that one party is more “responsible” with taxpayer funds than the other party.
The Budget Process and Presidential Terms
The federal fiscal year lasts from October 1 to September 30 (It ended on June 30 prior to 1976). So, the 2009 fiscal year ended in September of 2009, eight months after Bush left office. When Obama was sworn into office, Bush had already submitted his 3.1 trillion dollar 2009 budget almost a year earlier. He then signed the stack of resulting appropriations bills submitted to him by Congress throughout 2008 which authorized the federal spending that would take place once the 2009 FY actually began in October. Then, in the fall of 2008, Bush supported and signed additional spending bills providing for various bailouts and stimulus programs that marked the end of his presidency, and which would show up as spending in 2009. Needless to say, the already-enormous 2009 budget that Bush had submitted in early 2008 was not totally reflective of the full impact of the huge spending increases that would eventually be authorized by Bush. Bush’s original budget was $3.1 trillion, but once one adds in all the bailouts and stimulus spending also supported by Bush, the number is actually much larger, and this is the number that shows up in the spending figures now being attributed to Obama for FY2009.
This framework for calculating presidential spending should be applied generally to all presidential terms of office. It would be inaccurate and dishonest to attribute most 2001 federal spending to Bush, just as it would be wrong to attribute most 1993 spending to Clinton. Presidents can and do add to the budgets passed by their predecessors by signing supplemental appropriations bills early in their terms, but this can only account for a small portion of total spending that might occur during a president’s first year in office.
The 2009 Omnibus Appropriations Bill, for example, was signed by Obama six months before the end of the fiscal year, and coming in at less than half a trillion dollars, this spending was only a fraction of the 3.5 trillion or so in spending already signed into law by Bush earlier that fiscal year.
It is also important to note that just because spending is authorized in a certain fiscal year doesn’t mean it’s actually spent in that same year. This is especially true when we’re talking about new stimulus programs and discretionary spending. In all likelihood, only a portion of the money authorized in the spending bills signed by Obama in 2009 would actually show up as spending that occurred before September 30.
One of the better resources for understanding how much the federal government has spent -and when it spent the money- is through the data on federal outlays provided by the Congressional Budget Office. The CBO provides easy-to-use data on federal outlays from 1971 to 2010. Outlays are federal moneys that have actually been spent. In the government budget process, moneys are budgeted, authorized and allocated, but they only become outlays once they’ve actually been used to pay government employees or contract services or buy things.
Naturally, there is a lag time between the time that taxpayer dollars are appropriated and when they are actually paid out to Lockheed Martin or Henry Paulson and his friends, for example.
For this reason, and since the budget for the first year of a president’s term had already been passed months earlier, it is generally more appropriate to attribute to a new president the outlays that occur during the first full fiscal year of his administration. In Obama’s case, this would be the 2010 fiscal year which began on October 1, 2009.
Comparing the Presidents
The first chart shows the increase in federal outlays, year-by-year that has occurred since 1971 (Click on charts to enlarge).
Obviously, the history of federal outlays is one of unmitigated increase year after year, although we can also see that spending accelerated after 2001 and continued through 2009. Note also the very large jump in outlays from 2008 to 2009 when outlays increased more than 17 percent in one year from $2.9 trillion to $3.5 trillion. Since 1971, this rate of increase has only been surpassed once: in 1975 when outlays increased 23 percent over the previous year:
If we then take these numbers and look at rates of increase during full presidential terms, we see how each president fared. In each case, this graph includes the eight fiscal years following the fiscal year in which the president was sworn in. So, Carter’s outlays include the fiscal years from 1978 to 1981, and so on:
Federal outlays increased 74.9 percent during Bush’s term. In inflation-adjusted dollars, they increased 46.6 percent. In both cases, these are the largest increases for any president in decades. It’s only fair to compare to other two-term presidents, I suppose, so we’ll point out that under Clinton, federal outlays increased 27.4 percent in nominal dollars, and under Reagan, outlays increased by 53 percent.
With only one year of data to go on, Obama registers a decrease, although that is unlikely to become a trend.
In the next two charts, I’ve broken out spending increases by term, rather than by president. This doesn’t make Bush look much better:
This next one is adjusted for inflation. In inflation-adjusted terms, Bush’s second term is a 24 percent increase on his first term, which itself already increased outlays by 13 percent, and makes his second term the most profligate presidential term in at least 30 years.
Note: Adjusting inflation clearly makes a difference.In Carter’s case, it makes an especially significant difference, due to the large inflation rates experienced during his term which made the nominal increases in outlays much smaller in real terms. In this case, when I say “inflation,” I mean price inflation as described in the CPI. I recognize that the method of measuring this has changed over time, and that the CPI is flawed, but I have adjusted for it in the spirit of covering all my bases and in order to provide some additional context and insight.
Much political rhetoric hinges on the totally unsupportable notion that one political party is more fiscally responsible than another. Indeed, in this analysis, Bill Clinton ends up looking like a model of restraint in government spending, while Nixon, Ford, Reagan and G.W. Bush have all signed off on much larger amounts of spending. We do need to consider issues such as the strength of the opposition party in Congress during a president’s term, for example, but it is abundantly clear that no Republican president has ever been much of an obstacle to enormous amounts of government spending.
I should note that it’s not my intent here to portray Obama as powerless to cut spending approved by his predecessors. Obama could have been vetoing new appropriations, and could have cut spending via executive order. None of that will happen, of course, and no president in decades has done such a thing. On the other hand, the House Republicans’ declaration that they can’t vote to cut the budget because the budget year is half over illustrates how gung ho elected officials of any party are about cutting spending.
Nevertheless, George W. Bush is among the worst offenders, and since Obama took office, conservatives and Republicans have clearly taken a strategy of rehabilitating Bush’s record on spending by attempting to foist Bush’s 2009 spending on Obama. It should go without saying that Obama will no doubt be among the biggest and most irresponsible spenders in presidential history, but the massive and unprecedented increases in spending during the last decade, including the enormous increase from FY2008 to FY2009, were authorized by the Bush administration. One can attempt to blame Congress or “special interests” for all this spending, but the fact remains that Bush held the veto pen for eight years and chose not to use it.
Recent analyses like this one from FoxNews are both dishonest and inaccurate. Foxnews compares spending during Obama’s first year in office with Bush’s first year in office. Foxnews is obviously using the total federal outlays number of $3.5 tril. for FY2009 and attributing it to Obama. But it was Bush who signed off on the vast majority of this spending. Foxnews then compares this to $1.8 tril. in federal outlays that occurred during 2001, saying that “Bush spent $1.8 trillion in 2001.” Wrong again. The 2001 budget and the subsequent spending during FY2001 was authorized by Bill Clinton, not by Bush.
Spending isn’t the whole picture of course. Articles like this one by Karl Rove focus on deficits instead of total spending, but here the same strategy is employed. Rove states that “from the day Mr. Obama took office last year to the end of the current fiscal year, according to the Office of Management and Budget, the debt held by the public will grow by $3.3 trillion.”
How exactly is Obama responsible for deficits that existed on the day he took office? (He’s no more guilty than any other member of the Senate that voted for the 2009 appropriations in 2008.) Attempting to connect Obama to the deficits incurred in early 2009 is nothing more than smoke and mirrors. As with the huge leap in outlays from 2008 to 2009, the enormous growth in deficits from 2008 to 2009 is due to spending authorized by the Bush White House. I’ll provide some additional information on deficits in the next few days.