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The facts about the growth of spending under Obama, Part 2

at 06:02 AM ET, 05/31/2012


(Jewel Samad/AFP/GETTY IMAGES)

“There's been some disagreements between the PolitiFact and all the different fact checkers.”

— White House Press Secretary Jay Carney, May 30, 2012

 

Few things are more bothersome than that rare instance when fact checkers disagree. Our column last week, in which we awarded Three Pinocchios to Carney for citing a MarketWatch column on Obama’s spending patterns, stood in contrast to PolitiFact awarding a “Mostly True” to a Facebook post based on the MarketWatch column.

Note that we did not evaluate the same thing, which is one reason why we ended up in different places. Our focus was on the spokesman citing a blog post that we thought was deficient;  PolitiFact evaluated the Facebook post based on whether the Congressional Budget Office baselines added up.

 One critique we made of the MarketWatch report was that it did not use CBO’s analysis of the 2013 White House budget as the end point for its analysis, thus lowering the end result for Obama. (PolitiFact also took some heat for its analysis and published a roundup of some of the criticism.)

 Rex Nutting, the author of the MarketWatch column, disputed our analysis of his work but said: “I have no problem with you assigning Pinocchios to the White House based on this. The White House clearly does not want all those 2013 spending cuts to take place, so it’s a bit disingenuous of them to tout my column as proof of their fiscal responsibility on the one hand, while trying their best to spend more money on the other.”

 Former White House aide Jared Bernstein — whose blog Carney cited Wednesday — also said we were “right about the endpoint” but disagreed with the number of Pinocchios. (However, as we noted, we were not awarding them to Nutting, but to the White House.) Andrew Taylor, a budget writer for the Associated Press, meanwhile, weighed in with a sophisticated analysis that backed up our conclusions. 

Still, PolitiFact’s judgment of “Mostly True” has allowed commentators to pick and choose among the fact checkers. Two liberal columnists at The Washington Post, Ezra Klein and Eugene Robinson, even chose to emphasize PolitiFact’s conclusion, not ours. (Dudes!)

 For readers who are confused, we will explain why all these numbers end up in different places. UPDATE: PolitiFact has updated its original column to also emphasize we were rating different things. They noted: “The second portion of the Facebook claim -- that Obama’s spending has risen "slower than at any time in nearly 60 years" -- strikes us as Half True.” UPDATE: FactCheck.org also weighed in, finding fault with Nutting’s analysis and also claims by Mitt Romney that Obama started a spending “inferno.”

 

The Facts

When looking at Obama’s spending, the key issue is what to do about the 2009 fiscal year. Since the federal government’s fiscal year begins on Oct. 1, about four months took place in Bush’s presidency — and those were dramatic months of fiscal crisis and emergency spending.

Obama supported and voted for Bush-started programs such as the Troubled Asset Relief Program (TARP). Moreover, many key appropriations bills were held back by Democrats until Obama became president, and then he pushed through an $830 billion stimulus bill (which consisted of mostly spending). In ordinary times, one could argue that 2009 should be counted as Bush’s year, but in fact many of the key spending decisions were actually made by Obama.

 As the AP documented, programs such as TARP also mess up the figures in the later years. The straight-line CBO accounts of outlays that MarketWatch and PolitiFact used are distorted by the fact that repayments of TARP funds by banks and Wall Street firms in 2010 make the actual spending seem much smaller.

 By the AP’s calculation, repayments to TARP and reduced spending on Fannie Mae-Freddie Mac bailouts shrink the official 2010 spending figure by $317 billion and the 2011 spending figure by $72 billion. In other words, the raw numbers give a distorted picture.

 We agree that those adjustments should be made, which really changes the picture of Obama’s spending, at least in the early years of his presidency. Bernstein, by contrast, argues that  “MW’s using  official budget numbers and by those numbers, the Obama administration legitimately gets credit for effective management of the TARP.”

 The Republican takeover of the House of Representatives put the brakes on Obama’s spending ambitions, though whether that is a good or a bad thing depends on your perspective. (Bernstein views it as an opportunity lost.)

 There are other ways to change this picture, such as excluding interest on the debt (on the theory that other presidents ran up those bills). Or one could look just at changes in discretionary spending, on the theory that much of the rest of government spending is on automatic pilot unless specific laws are changed. As we mentioned in our original column, looking at spending as a percentage of the gross domestic product puts Obama in the worst light.

 The most authoritative examination of this question would be by the experienced budget analysts at the CBO or the Office of Management and Budget. We continue to find it curious that the White House would rely on the work of bloggers for budgetary analysis rather than the career employees who do this for a living.

 

The Pinocchio Test

 

We reaffirm our previous ruling.

 Three Pinocchios

 


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    About the Blogger

    Glenn Kessler has covered foreign policy, economic policy, the White House, Congress, politics, airline safety and Wall Street.

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