The White House and the mainstream media have been making a big deal out of a recent MarketWatch column by Rex Nutting, who said that one of the biggest lies about President Obama is that he is a reckless spender.
According to Nutting, federal spending under Obama is rising at the slowest pace in over 60 years despite the presence of record high deficits.
That would be great news for Obama if it were true, but as the Washington Post Fact Checker pointed out last week, Nutting’s analysis is deeply flawed.
First of all, there are a few methodological problems with Nutting’s analysis — especially the beginning and the end point.
Nutting basically takes much of 2009 out of Obama’s column, saying it was the “the last [year] of George W. Bush’s presidency.” Of course, with the recession crashing down, that’s when federal spending ramped up. The federal fiscal year starts on Oct. 1, so the 2009 fiscal year accounts for about four months of Bush’s presidency and eight of Obama’s.
In theory, one could claim that the budget was already locked in when Obama took office, but that’s not really the case. Most of the appropriations bills had not been passed, and certainly the stimulus bill was only signed into law after Obama took office.
Nutting acknowledges that Obama is responsible for some 2009 spending but only assigns $140 billion for reasons he does not fully explain. (Update: in an email Nutting says he attributed $120 billion to stimulus spending in 2009, $5 billion for an expansion of children’s health care and $16 billion to an increase in appropriations bills over 2008 levels.)
On the other end of his calculations, Nutting says that Obama plans to spend $3.58 trillion in 2013, citing the Congressional Budget Office budget outlook. 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.
The correct figure to use is the CBO’s analysis of the president’s 2013 budget, which clocks in at $3.72 trillion.
That may not seem like a big difference but the effect is that, by the Post’s calculations, compound spending by Obama, starting in 2010, is actually 3.3 percent, which is more than double Nutting’s figure of 1.4 percent.
The Post also points out that the numbers are even higher if you look at what Obama has proposed to spend versus the CBO estimates of his spending.
So in every case, the president wanted to spend more money than he ended up getting. Nutting suggests that federal spending flattened under Obama, but another way to look at it is that it flattened at a much higher, post-emergency level — thanks in part to the efforts of lawmakers, not Obama.
Another problem with Nutting’s analysis is that the figures are viewed in isolation. Even 5.5 percent growth would put Obama between Bill Clinton and George W. Bush in terms of spending growth, but that does not take into account either inflation or the relative size of the U.S. economy. At 5.2 percent growth, Obama’s increase in spending would be nearly three times the rate of inflation. Meanwhile, Nutting pegs Ronald Reagan with 8.7 percent growth in his first term — we get 12.5 percent CAGR — but inflation then was running at 6.5 percent.
The claim of Obama’s low spending doesn’t hold up when calculated as a percentage of GDP, according to the Post.
One common way to measure federal spending is to compare it to the size of the overall U.S. economy. That at least puts the level into context, helping account for population growth, inflation and other factors that affect spending. Here’s what the White House’s own budget documents show about spending as a percentage of the U.S. economy (gross domestic product):
2008: 20.8 percent
2009: 25.2 percent
2010: 24.1 percent
2011: 24.1 percent
2012: 24.3 percent
2013: 23.3 percent
Using these figures, the Post says, would mean spending levels under Obama are the highest since the end of World War II, which is completely the opposite of Nutting’s claim.
But that hasn’t stopped the liberals in the media from hailing Nutting’s figures as a way to praise Obama while blasting Romney and the GOP.
One of the worst offenders is Eliot Spitzer, the disgraced former governor of New York and failed CNN host who is now hosting a show on the little seen Current TV.
Spitzer said that the claims that Obama is a big spender are false and that incontrovertible numbers back that up. The same numbers Nutting used.
Using those now largely discredited numbers, Spitzer admitted that the deficits are gargantuan, but said that it’s the Republicans who are at fault with their enormous tax cuts, combined with a recession and two wars that we never planned on paying for.
I guess he has conveniently forgotten about Obama’s $787 billion stimulus package, which failed miserably.
Nutting’s attempt to help Obama by defending his spending record has backfired and left the liberal media and the President with egg over all their faces.