No, Obama Is Not “the Smallest Government Spender Since Eisenhower”
As Reason Magazine’s Peter Suderman and AEI’s James Pethokoukis have noted, federal spending under the Obama administration has been at historic highs, consuming 24 percent of the economy, on average, compared to around 20 percent under George Bush, and 20 percent or less in most years since the end of World War II. (That percentage holds true even if you blame Bush for the record spending in 2009 after he left office, which is somewhat misleading). In 2011, the federal budget reached $3.6 trillion, compared to $2.9 trillion in 2008. By contrast, under the Eisenhower administration, the federal budget ranged from $76 billion in 1953, to $97 billion in 1961, according to the World Almanac. So Obama is obviously a bigger spender than either Bush, or Eisenhower, contrary to Rick Ungar’s absurd claim that Obama is “the smallest government spender since Eisenhower.” Ungar cites the claims of a liberal reporter, MarketWatch’s Rex Nutting, who has claimed that “under Obama, federal spending is rising at the slowest pace since Dwight Eisenhower.” As the Washington Examiner notes, this is misleading, since it largely blames Bush for $400 billion in spending in 2009 that Obama was responsible for, including major spending increases that Bush had opposed:
Nutting’s piece employs several abuses of the numbers (including some underhanded switching between projected and actual spending data), but his most productive sleight of hand is to assign all of fiscal year 2009’s spending to President Bush. Nutting doesn’t start the clock on Obama’s spending until fiscal 2010.
In most cases, that would be fair, because presidents typically sign the next year’s spending bills in the calendar year before they leave office. But not in 2009. The Democratic Congress, confident Obama was going to win in 2008, passed only three of fiscal 2009’s 12 appropriations bills (Defense; Military Construction and Veterans Affairs; and Homeland Security). The Democrat Congress passed the rest of them, and Obama signed them.
So whereas Bush had proposed spending just $3.11 trillion in fiscal 2009, for a 3 percent increase, Obama and the Democrats ended up spending $3.52 trillion, for a 17.9 percent increase in spending — the highest single-year percentage spending increase since the Korean War.
By the end of Obama’s first year in office, spending as a percentage of GDP was 25.2 percent, the highest it has ever been since World War II. As Obama’s stimulus spending has receded, spending as a percentage of GDP has gone down, but only slightly. Under President Bush, spending averaged 19.6 percent of GDP. Under President Clinton, it was 19.8 percent. The historical post-World War II average is 19.7 percent. In 2012, after four years of Obama’s fiscal leadership, it is expected to be 24.3 percent.
Treating the inflated 2009 federal budget as the benchmark for whether Obama is overspending is ridiculous. It contained billions of dollars in extraordinary spending on bailouts and expenses related to the 2008 financial crisis. Yet, as Reason’s Peter Suderman notes, “what Obama did in subsequent budgets was stick to that newly inflated level of spending. Outlays in 2010 were just a hair short of $3.5 trillion. In 2011, they rose further, approaching $3.6 trillion.” As AEI’s Pethokoukis notes,
Obama chose not to reverse that elevated level of spending; thus he, along with congressional Democrats, are responsible for it. 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.
It’s as if one of my teenagers crashed our family minivan, and I had to buy a new one. And then, since I liked that new car smell so much, I decided to buy a new van every year for the rest of my life. I would indeed be a reckless spender.
Obama can’t avoid responsibility for 2009, either. As a columnist notes,
Obama didn’t come in and live with the budget Bush had approved. He immediately signed off on enormous spending programs that had been specifically rejected by Bush. This included a $410 billion spending bill that Bush had refused to sign before he left office. Obama signed it on March 10, 2009. Bush had been chopping brush in Texas for two months at that point. Marketwatch’s Nutting says that’s Bush’s spending. There are other spending bills that Obama signed in the first quarter of his presidency, bills that would be considered massive under any other president — such as the $40 billion child health care bill, which extended coverage to immigrants as well as millions of additional Americans. This, too, is called Bush’s spending. . .Frustrated that he can’t shift all of Obama’s spending to Bush, Nutting also lowballs the spending estimates during the later Obama years. For example, although he claims to be using the White House’s numbers, the White House’s estimate for 2012 spending is $3.795 trillion. Nutting helpfully knocks that down to $3.63 trillion. But all those errors pale in comparison to Nutting’s counting Obama’s nine-month spending binge as Bush’s spending.
If Obama had his way, spending would have been even bigger than it is, since the Congress has not approved as much spending as Obama sought in his budget proposals, as Nutting himself has conceded. As the Congressional Budget Office has noted, “The President’s proposals would add $4.8 trillion to the national debt,” increasing “the cumulative deficit from 2010 to 2019 to $9.3 trillion.” By contrast, Bush wanted to spend less than the liberal Congress that was elected in 2006. Spending went up from $2.784 trillion in 2007 to $2.901 trillion in 2008 and $3.5 trillion in 2009. (However, Bush himself was a big spender, who increased spending at a faster rate than his predecessor did. To outspend Bush takes real effort, and neither he nor Obama should be treated as the “new normal” for justifying yet more spending binges.)
You may wonder why I am even citing the blogger Rick Ungar, who is not an economist, but rather a left-wing lawyer who wants more government control of the health care system. Ungar is a blogger at Forbes who gets his traffic there partly due to the man-bites-dog-quality of the “conservative” Forbes seemingly endorsing all sorts of left-wing talking points and legends promoted on Ungar’s blog. (Forbes’ publisher, unlike many of its staff, is conservative.) For example, this link describes Ungar’s blog post as an assertion by Forbes itself that Obama is “the smallest government spender since Eisenhower.” The fact that Ungar’s blog is on the web site of the supposedly conservative Forbes Magazine enables liberals like Roger Ebert to say that “even Forbes, of all places” agrees with whatever is the factually-baseless liberal taking-point of the day, by linking to Ungar’s blog on the site. Everything Ungar says in favor of big government, or against free market-oriented economic policies, is treated by those who agree with him as a confession or admission by a conservative magazine that markets don’t work, or that the conservative reformers that Ungar criticizes must be extremists to be criticized even at Forbes.
Ungar’s most famous blog post was a self-contradictory, assume-your-own-conclusion blog post in which he claimed it was a “lie” for Wisconsin Governor Scott Walker to say he wanted state workers covered by collective bargaining agreements to “contribute more” to their pension and health insurance plans, because, Ungar claimed, these workers already paid 100 percent of such costs. Of course, as both the conservative National Review and the liberal Milwaukee Journal-Sentinel (which endorsed Obama and opposed Governor Walker’s collective bargaining reforms) noted, state workers did not pay 100 percent of their pension and health costs. So Ungar was completely wrong on the facts.
State labor unions objected to Governor Walker’s reforms precisely because state workers did NOT pay most of their health care costs, but would have been required to pay an increased (but still far less than 100 percent) share of their healthcare costs under his reforms. Ungar alleged that Governor Walker had claimed that the state workers had received a “gift” of health insurance and pension costs from the state, but Walker never said anything of the kind, or claimed it was a “gift,” as opposed to a costly bargained-for provision of a collective bargaining agreement; this “gift” assertion was just the peculiar inference Ungar himself drew from the combination of Walker’s statement that he wanted state employees to pay a greater fraction of their health and pension costs, and Ungar’s own factually inaccurate assumption that state workers already paid all of their health care and pension costs (an assumption based on his erroneous interpretation of a faulty analysis by David Cay Johnston, who was a writer for the left-wing magazine The Nation). This factually-inaccurate blog post has been tweeted 5,139 times, mostly after it was tweeted by liberal critic Roger Ebert, who said that “even Forbes” had supposedly debunked Governor Walker’s claims (when it was Ungar — not Forbes itself — that had attacked Walker).