President Barack Obama said Thursday that his administration has reduced the budget deficit significantly over the past few years — a boast that conveniently leaves out several key details about how the deficit rose so quickly under Obama, and how it really fell.
“We’ve done all this while cutting our federal deficit by about two-thirds,” Obama said Thursday in Arizona. “And I’m going to repeat that, because they did a poll the other day and like 70 percent of the people think the deficit is going up.”
“The deficit has gone down by two-thirds since I was President of the United States,” he said. “So we’re doing all this in a fiscally responsible way.”
The White House repeated that boast in a tweet showing that “the deficit has gone down by two-thirds”:
— The White House (@WhiteHouse) January 8, 2015
Here are seven key facts the White House is leaving out when it talks about the deficit:
1) The Annual Budget Deficit is Falling, but It’s Still Big, and It’s Still Adding to the Total National Debt.
The budget deficit is the amount that the government spends over its annual collection of taxes. Yes, it has fallen — it was $1.4 trillion in 2009, and was $483 billion in 2014.
But that $483 billion is huge. For example, it’s just a bit lower than the entire Defense budget for the current fiscal year. And that still adds to the national debt, which now stands at $18 trillion.
2) Obama’s Lowest Budget Deficit is Still Higher Than George W. Bush’s Biggest Deficit.
President Bush was seen by many as a big spender who squandered a rare budget surplus. But according to the Office of Management and Budget, Bush’s highest annual budget deficit was $458 billion.
That’s still $25 billion less than Obama’s lowest deficit: $483 billion in the just-finished 2014 fiscal year, and several years into what Obama himself has called an economic recovery.
So for all of Obama’s boasting this week, Obama still hasn’t managed to preside over a deficit that’s lower than Bush’s highest deficit.
3) Real Credit for the End of $1 Trillion-plus Budget Deficits Belongs to the End of the Great Recession, and Renewed Republican Pressure to Keep Spending Down.
Bush and Obama together created the huge, $1.4 trillion deficit that emerged in 2009, thanks to the bank and auto bailouts under Bush, and the huge stimulus and extended auto bailouts under Obama.
As the crisis receded, it was House Republicans that finally forced some spending reductions through passage of the Budget Control Act. That pressure from the House led to reduced overall spending for two years in a row, in 2012 and 2013.
That, combined with a growing economy and growing tax revenues over those years, nearly cut the budget deficit in half by 2013.
4) Obama Was Opposing Those Spending Reductions Year After Year.
While House Republicans were putting their foot down on spending, Obama was proposing even more spending in his annual budget proposals.
Since 2011, Obama has proposed spending between $3.7 and $3.8 trillion each year, more than $200 billion more per year than what was actually spent in those years. Those proposals fly in the face of Obama’s boast that his own actions are helping to reduce the deficit.
A few of Obama’s budget proposals received votes in the House and were rejected unanimously, by both Republicans and Democrats.
5) Obama Has Rejected GOP Proposals to Eliminate the Deficit and Start Paying Down the Debt.
In 2012, when some Republicans were proposing a plan to balance the budget in 10 years, GOP members argued that none of Obama’s plans would ever balance, and that Obama was rejecting any attempt to finally balance the budget.
That charge is confirmed by Obama’s own budget documents. His budget proposal for 2015 foresees deficits that average $500 billion per year for the next decade, a recipe for adding $5 trillion more to the national debt over that time period.
That assumes very optimistic increases in tax receipts that Obama assumes would increase $200 or $300 billion per year.
6) Other Analysts Say the Deficit is About to Get Worse.
About those optimistic estimates on tax receipts? They’re not shared by the Congressional Budget Office.
CBO says the government will collect $40.2 trillion over the next decade, not the $43.8 trillion Obama anticipates.
And that means annual trade deficits that won’t stay in the $500 billion range, as Obama hopes. Instead, CBO sees the deficit rising again to more than $600 billion by 2019, and nearly $1 trillion by 2024.
7) Total National Debt Will Nearly Double Under Obama.
When Obama took office, the national debt was $10.6 trillion. As of January 2015, it stood at just over $18 trillion.
If the budget deficit stays around $500 billion a year for the next two years, as expected, total debt will exceed $19 trillion by the time Obama leaves office.