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Source link: http://archive.mises.org/16107/bushs-huge-budget-numbers-blamed-on-obama/

Bush’s Huge Budget Numbers Blamed on Obama

March 21, 2011 by

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.

Conclusions

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.

{ 19 comments }

The Fringe Economist March 21, 2011 at 11:10 am

In the end it was probably George Washington’s fault

win July 25, 2011 at 5:09 pm

Washington was probably one of the few we shouldn’t blame.
The article has it a bit wrong though. Congress did not approve Bush’s budget. They passed an Omnibus bill to fund most programs for the rest of the year after Obama got in. Half of TARP was also under Obama, he asked Bush to request it but it went to Obama.
Congress passed continuing resolutions funding the government at the prior year for most of the appropriations until Obama came in. They passed a couple of appropriation bills they had no disagreement with Bush on.
The omnibus bill passed with lots of earmarks, but Obama said he had to sign it anyhow.
So much of 2009 was on Obama. That said, it is that Obama seems to have troubles with bringing the spending down himself, from the new higher levels set by increases durning the recession. Those spending levels should not be considered a “new norm”, nor should Bush’s. Rather we should work to get a balanced budget, with lower spending levels.

Walt D. March 21, 2011 at 11:54 am

Obama was a Senator before he was President. He voted for some of the Bush increases, including the infamous bailout. We seem to forget that it is Congress that controls spending.

bob March 21, 2011 at 9:28 pm

lol. Obama never voted on anything as a senator…

Bogart March 21, 2011 at 12:42 pm

Also by this same logic the Obama Administration is fighting like crazy to keep minute decreases in spending from taking place. So literally, he is worsening the Bush disaster. But the Democratheads are partially correct in several years this issue will be a non problem. In this year alone the USG has to refund 8trillion in due short term loans but the issue is other than Federal Reserve, who will purchase them?

Iain March 21, 2011 at 1:20 pm

Let me stop laughing first. Anything that Bush did will pale in comparison to the Obama agenda. If past trends are any indication of what’s to come, obamacare could end up costing tens of trillions of dollars.

Scott Thomas August 17, 2011 at 8:03 pm

So lets raise taxes and pay for it. The act will decrease the budget deficit when it finally gets implemented, and it can certainly be improved upon in the coming years. Perhaps by eventually eliminating the profit motive, which is the real problem with our healthcare system.

Junk Science Skeptic March 21, 2011 at 1:23 pm

Any budget passed between January 2007 and January 2011 rests as much on the shoulders of the Pelosi-Reid Democrat-controlled Congress as it does on Bush.

Jack March 21, 2011 at 1:53 pm

Junk Science Skeptic: Thank you for stating the obvious.

Obama will be the ultimate destroyer of this country through his “economic policies.” There’s no defending him.

Anthony March 21, 2011 at 6:35 pm

There is plenty of blame to go around. Let’s give Bush his fair share, at least.

Dick Fox March 21, 2011 at 3:43 pm

Ryan,

Thanks for the honesty. Bush was a disaster in the last two years of his presidency. We can try to sweeten the poison but like it, or not your analysis is spot on.

But now to President Obama. If you are on the corporate board and your CEO has virtually destroyed your company, when you hire a new CEO you certainly don’t expect him to do the same things that your first CEO did to create the problems. My criticism of Obama is that his economic team continued the horrible policies of the Bush administration.

I wish that we had fired our earlier CEO (except that I am not sure the proposed replacements were any better) but simply because we did not fire a bad CEO does not lock us into keeping an equally bad CEO. It is time to “hire” a CEO that will reverse both the Bush and Obama economic policies.

Franklin March 21, 2011 at 5:54 pm

Yes, it is time we “hire” the good CEO, unlike all the other bad CEOs. We must find that perfect philospher king and all shall be right with the world. Never mind the past several hundred years, where others opined for the same in far more eloquent terms than I.
This time it will happen; I can just feel it.
Change is a-comin’.
pfft…

R Lee March 23, 2011 at 6:10 am

Yes, looking at what seems to be the coming lineup aren’t you just overwhelmed with the great choices? Is there a “scum test” they have to pass to be considered?

Adam March 22, 2011 at 6:43 am

I think most people missed the overall point of this post. It wasn’t to exonerate Obama, but rather to point out that “Fiscal conservative” is at best a misnomer, and at worst, a steaming pile of shit.

Oaege March 22, 2011 at 4:25 pm

When the Democrats took over Congressional purse strings early 2007, all restraint was gone — pure pedal-to-the-medal spending took over.

RTB March 22, 2011 at 9:16 pm

Not that I don’t agree with the premise of the article, nor am I a Republican or a “conservative”, but perhaps we should look at who controlled congress during any time period in question? Surely, the President has input and influence, but congress “controls the purse strings” and is really the driving force behind the federal budget.

Robert July 12, 2011 at 9:23 pm

More smoke and mirrors. The budget that Bush himself submitted to Congress in 2004 for FY2005 pegged federal spending levels at their highest in 30 years. Hopefully I don’t need to remind you that Democrats did not control the House in 2004. And when they did take control in 2007, they did so without a veto proof majority. Mr. McMaken is correct in his observation that Bush could have picked up a veto pen but chose not to. More to the point, it’s patently absurd that conservatives make an earnest attempt to attribute all that spending to the last 1/4 of Bush’s presidency. Remember, a little common sense (and a good memory) go a long way…

AG March 24, 2011 at 3:53 pm

Ryan,

Thank you for the honesty. It is a breath of fresh air for someone who does not like Obama’s policies to actually be reasoned and reasonable about the truth. We shall see if Obama’s policies end up being worse than his predecessors, but so far the history is that democrat presidents are actually the ones who attempt more spending restraint! It stuns me that so-called fiscal conservatives keep voting Republicans, how is more spending and less taxes fiscally responsible, let alone fiscally conservative? At least the Democrats are not hypocrites, they tell you what they are going to do and, like it or not, it is at least fiscally responsible (if you are going to spend more, for goodness sake, don’t lower taxes! I would prefer you not to spend more, but there is an inflow and outflow balance sheet, you can’t ignore either side).

DVSRomad August 5, 2011 at 9:02 am

Really? Bush does bear a lot of blame for what he did during his presidency, and yes he put forth a large budget in 2004, it takes money to run a war (or two). What is sad is that Liberals and Conservatives have lost the ability to “see reality” in front of them.

The Democrats are Hypocrite, just as are the Republicans. Don’t fool yourself.

Yes Nancy Pelosi and Harry Reid bear an enormous amount of blame for where we are having put together that Stimulus boondoggle that increased the nations debt like no other before.

As with any President, He/she (yes there may be a she in the future) will get the blame/praise for anything the previous President did during the first 2 years of their term, after that it is ALL on them. This applies whether it was really Congress’s fault/incite that caused any Failure/Good Fortune.

But as stated above, when When Obama became President, he took over a Government that was controlled by his Party. He could have revoked a lot of the Bush era stuff and reduced spending, but he allowed the leaders of both houses to put together one of the worst financial travesty’s ever to have come out of congress. The Republicans did not vote foe it at all ad still it passed, so please do not say this was all Bush’s fault. The Obama pushed his health care crap on congress, holding secret meetings where it appears he bribed and threatened members of his own party to vote fore it even when they had publicly stated they were against it, because of the amount of unfunded money it would cost.

So in closing, Bush does bear blame, but Obama and the Democrats now bear as much if not more, and if you are unable to see this, then…it will just be business as usual for you.

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