White House Says Obama Has Demonstrated 'Fiscal Restraint' – But Is That Really True? Nope...

While defending President Obama’s fiscal record last week, White House Press Secretary Jay Carney told reporters to not “buy into the B.S.” about his boss being a big spender.

The president “has demonstrated significant fiscal restraint,” Carney said.

The Press Secretary went on to cite a recent MarketWatch report titled “Obama Spending Binge Never Happened” by Rex Nutting.

Quoting Nutting’s story, Carney said: “Although there was a big stimulus bill under Obama, federal spending is rising at the slowest pace since Dwight Eisenhower brought the Korean War to an end in the 1950s.”

“I simply make the point, as an editor might say, to 'check it out,'" Carney told the press pool.

Even President Obama himself, perhaps emboldened by Nutting’s story, told a crowd last Thursday: “Since I’ve been president, federal spending has actually risen at the lowest pace in nearly 60 years.”

Nutting’s point, according to Bloomberg, is a “fact not often noted in the press and certainly never mentioned by the Republicans.”

There may be a reason Nutting’s thesis (i.e. that the Obama spending binge never happened) hasn’t been reported by the press or Republicans: it simply isn’t true. There has been a spending binge.

How wrong is Nutting’s report? Let’s start with this piece from him:

Of all the falsehoods told about President Barack Obama, the biggest whopper is the one about his reckless spending spree…Almost everyone believes that Obama has presided over a massive increase in federal spending...Even Democrats seem to think it’s true. Government spending under Obama, including his signature stimulus bill, is rising at a 1.4% annualized pace -- slower than at any time in nearly 60 years.

James Pethokoukis at the American Enterprise Institute challenges Nutting on this point.

“Nutting arrives at that 1.4% number by assigning 2009 -- when spending surged nearly 20% -- to George W. Bush,” Pethokoukis writes.

He quotes Nutting:

The 2009 fiscal year, which Republicans count as part of Obama’s legacy, began four months before Obama moved into the White House. The major spending decisions in the 2009 fiscal year were made by George W. Bush and the previous Congress. Like a relief pitcher who comes into the game with the bases loaded, Obama came in with a budget in place that called for spending to increase by hundreds of billions of dollars in response to the worst economic and financial calamity in generations.

“Let me complete the metaphor for Nutting,” Pethokoukis counters, "'Then as those runners scored, Obama kept putting more on base.'"

Image courtesy Nutting's MarketWatch report

“Obama chose not to reverse that elevated level of spending; thus he, along with congressional Democrats, are responsible for it,” he adds.

“Only by establishing 2009 as the new baseline, something Republican budget hawks like Paul Ryan feared would happen, does Obama come off looking like a tightwad. Obama has turned a one-off surge in spending due to the Great Recession into his permanent New Normal through 2016 and beyond.”

Here is how Nutting probably should've framed the issue:

Image courtesy AEI

When you look at it this way, it would seem the president's spending record has less to do with "restraint" and more to do with, well, "binging."

And AEI wasn’t the only organization that challenged the MarketWatch report. Glenn Kessler of the Washington Post reviewed the data and awarded Carney, President Obama, and Nutting three Pinocchios.

"Nutting acknowledges that Obama is responsible for some 2009 spending but only assigns $140 billion for reasons he does not fully explain," Kessler writes.

“Nutting says that Obama plans to spend $3.58 trillion in 2013, citing the Congressional Budget Office budget outlook,” Kessler writes. “But this figure is CBO’s baseline budget, which assumes no laws are changed, so this figure gives Obama credit for automatic spending cuts that he wants to halt.”

Kessler suggests using the CBO’s analysis of the president’s 2013 budget, which would give us $3.72 trillion.

This is what is would look like:

• 2008:  $2.98 trillion
• 2009:  $3.27 trillion
• 2010:  $3.46 trillion
• 2011: $3.60 trillion
• 2012: $3.65 trillion
• 2013:  $3.72 trillion

"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," Kessler reports.

"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," he adds.

So what is the Washington Post's takeaway from the MarketWatch report and the White House's claim to "fiscal restraint"?

“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,” Kessler concludes.

“The data in the article are flawed, and the analysis lacks context -- context that could easily could be found in the budget documents released by the White House,” Kessler adds.

Meanwhile, over at the Associated Press, the president and the MarketWatch report fared no better.

"The problem with that [fiscal restraint] claim is that the Wall Street bailout is part of the calculation. The bailout ballooned the 2009 budget just before Obama took office, making Obama's 2010 results look smaller in comparison," the AP's Andrew Taylor writes.

"And as almost $150 billion of the bailout was paid back during Obama's watch, the analysis counted them as government spending cuts," he adds.

The AP points out that the notion that the president has been "tightfisted" is contingent on the idea that he "had less of a role setting the budget for 2009 than he really did."

Of the report the White House bases its claim on, the AP had this to say:

The analysis simply looks at the year-to-year topline spending number for the government but doesn't account for distortions baked into the figures by the Wall Street bailout and government takeover of the mortgage lending giants Fannie Mae and Freddie Mac.

The MarketWatch study finds spending growth of only 1.4 percent over 2010-2013, or annual increases averaging 0.4 percent over that period. 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.

And just in case the arguments in the above are a bit too “wonky” for your taste, here’s a graph from Political Math that explains the inaccuracies in the MarketWatch article:

Image courtesy Political Math

“Nutting wants to use the 2009 CBO estimates, but only one column (only for attacking Bush on spending). He wants to compare estimates from one year to actual spending from other years to the CBO baseline from this year,” Political Math reports, “And, as if he is a magical cherry-picking elf, he manages to pick just the right numbers to give him just the right data.”

“Congrats, Mr. Nutting. I don't think you're a huge jerk, only that you're hilariously unqualified for your job,” the article adds.

(H/T: WFB)

This story has been updated.