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The Myth of Obama's Big Spending

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Andrew Romano – Tue Feb 8, 8:16 am ET
NEW YORK – Does the president really suffer from what House Speaker John Boehner calls a “spending illness”? Not according to an exclusive Newsweek-Daily Beast estimate of his outlays on new legislation since taking office.
• The Newsweek Daily Beast team found that President Obama “spent” $21 billion more on GOP-friendly tax cuts than on government programs. • He’s laid out $884 billion for six major, immediate spending increases that aren’t offset elsewhere in the budget, from the stimulus package to Cash for Clunkers. • But he’s made $905 billion in tax cuts, including the Bush tax-cut extension in December. • His health-care reform will tilt his spending vs. tax-cutting equilibrium toward the former in future years.
Nothing unites Republicans quite like the unshakable belief that Barack Obama has become the Carrie Bradshaw of 1600 Pennsylvania Avenue, unable to stop himself from frittering away ridiculous sums of money on frivolous things. But what Republicans never mention when railing against Obama’s alleged fiscal recklessness is how much money he has spent, and what exactly he’s spent it on.
To rectify the situation, Newsweek and The Daily Beast have come up with an exclusive estimate of the amount the president has spent on new legislation since taking office in January 2009. This isn’t the sum total of all government outlays; that number would include spending on mandatory entitlement programs such as Social Security and Medicare, which no president can control, as well as spending on income-support programs such as food stamps and Medicaid, which automatically increases as citizens get poorer (i.e., during a recession). Instead, we focused on the times when Obama decided to spend money that wouldn’t have been spent if the government had simply been humming along on autopilot.
What we—along with the economic analyst Loren Adler at the Bipartisan Policy Project, a think tank founded in 2007 by Republicans Howard Baker and Bob Dole and Democrats Tom Daschle and George Mitchell—found may surprise people who see Obama as the Big Spender in Chief. Over the last two years, the president has decided to “spend” $21 billion more on tax cuts—the GOP’s preferred policy response to, well, everything—than on government programs.
The math isn’t particularly complicated. So far, the Obama administration has pushed for six major, immediate spending increases that aren’t offset elsewhere in the budget: the American Reinvestment and Recovery Act (aka “the stimulus package”), which had a 2009-10 price tag of $340 billion, according to the nonpartisan Congressional Budget Office; the GM/Chrysler bailout and other portions of the Troubled Asset Relief Program, which have largely been paid back ($25 billion); unemployment-insurance extensions ($67 billion); COBRA extensions ($9 billion); Cash for Clunkers ($3 billion); and loans to automakers for energy-efficiency improvements ($8 billion). That’s $452 billion. Factor in $296 billion in stimulus funds that have yet to be spent and $136 billion in refundable tax credits that passed in December as part of Congress’ bipartisan tax compromise, and you wind up with $884 billion on the spending side of the equation.
Obama has slashed one tax dollar for every dollar he’s spent on government programs.
That’s a hefty sum of money. But here’s the interesting thing: Obama’s tax cuts have been even bigger. The first of them, $238 billion in cuts for taxpayers and businesses, came as part of the stimulus package. The second portion, $721 billion worth, arrived in December, again as part of Congress’ bipartisan tax compromise. Subtract $54 billion in forthcoming stimulus-related tax hikes, and you’ve got a grand total of $905 billion in tax cuts. In other words, Obama has slashed one tax dollar for every dollar he’s spent on government programs.

(One yet-to-be-implemented program worth considering: Obama’s new health-reform law. In March 2010, the CBO estimated that “Obamacare” would produce a 10-year spending increase of approximately $250 billion and a tax increase of slightly more than $400 billion, totals that will tilt the equilibrium between Obama’s spending and tax cutting toward the former in future years. The CBO also estimated that the new law will reduce the deficit by $118 billion over the same period.)
Regardless of reality, Republicans have a strong incentive to keep characterizing the president’s spending as an “out-of-control,” “unprecedented” “spree” that “threatens” “our children’s future.” During a recession, especially a Great Recession like the one we’re only just beginning to emerge from, individuals and families tend to react by spending less and saving more, so they balk, despite the dictates of Keynesian economics, when the federal government doesn’t do the same. Accusing Obama of wasting money is an easy way to score political points with voters who’ve been forced to pinch their own pennies in recent months.
But during an accounting argument, it’s useful to have real, live numbers to battle over. On the rare occasion Republicans do allude to real stats, they tend to shout about the growing short-term deficit, a problem that has a lot more to do with declining recession-era tax revenues and increasing safety-net outlays than anything Obama has done, or not done. Instead, Republicans should be referring to the amount the president has decided to spend so far: $884 billion. They can say it’s too much, and that a thriftier approach would’ve been better for the country. Democrats can reply that rescuing the U.S. economy from a second Great Depression for less than the price of the wars in Iraq and Afghanistan was a relative bargain. Both sides, meanwhile, can debate the wisdom of cutting more than $900 billion in taxes while spending is going up. At least they’ll be arguing about facts, not fantasies.
Andrew Romano is a senior writer for Newsweek. He reports on politics, culture, and food for the print and Web editions of the magazine and appears frequently on CNN and MSNBC. His 2008 campaign blog, Stumper, won MINOnline's Best Consumer Blog award and was cited as one of the cycle's best news blogs by both Editor & Publisher and the Deadline Club of New York. Follow Andrew on Twitter.

Okay ... so he's spent almost $900 billion, yet he's NOT a big spender ... why? Well, because he's "spent" another $900 billion on tax cuts? (Yet most of that wasn't actually spent ... just extended from Bush's term). Wouldn't that not only make him a big spender, but an irresponsible big spender? (At least that's what everyone said for Bush when he spent less and had a much smaller budget deficit) ... I love Yahoo News spin-math.

Yesterday they had a junk article saying how taxes were actually lower under Obama than they were for Bush. But then you dig into the actual "math" ... and the fact was that more gross tax was COLLECTED under Bush than under Obama ... it wasn't a percentage thing. When you figure in the 10% unemployment, and people making much less in wages now, it would be expected that less tax is getting collected now. It pretty much validates the Republican argument for "Voodoo economics" ... it's better to charge less tax percentage, and let the money move in the economy, than to charge a larger percentage, and stiffle it.

Bottom line: Deficits are at record highs, and this year's projected deficit is even higher than last year's.

They can spin it any way they want it, but the numbers do not lie.


Furthermore, tax cuts are not spending, it is a reduction in revenues.... for which they never accordingly reduced expenditures. If they were going to extend the tax cuts, then they should have also found something to stop paying for. End of story.

GREAT THOR'S HAMMER!

you mean if I reduce my revenue while spending more I will incur more deficit?

Wow, where to start.

Let's look at a household budget. Say you owe $100k in debt, and are adding $10k in debt per year. Would you say it's OK if you reduced your income by $12k at the same time you increased your annual debt by an additional $10k to $20k?

It's crazy talk

It's not good to increase your spending, as long as it's less than the decrease in income.

When spending is greater than revenue there is a problem...Cuts, not expanded spending needs to be implemented

Interesting how a tax cut is seen as a decrease for the gov't........as if all the money is theirs to begin with and they "allow" workers to keep a little.

Obama has - to date - governed right on par with George W. Bush. There's a few slight differences between the two, but not many.

But, man, it's funny to watch people bicker and go crazy about one while having a certain fondness or defense for the other.

Politics is one hell of a circus, and there's a sucker born every day.

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"The Myth that Obama's Big Spending is a Myth"

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Fixed!

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But he’s made $905 billion in tax cuts, including the Bush tax-cut extension in December.

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This is BS. He is claiming he cut taxes using an extension of rates already being implemented......that's not a tax cut. That is propaganda used by a political party that is on the ropes. He never cut any taxes, the rates were set, had they expired, it would have been a tax hike. No matter how you word it, keeping present rates, is not a tax cut.

Also tax cuts are not spending. That is another twist of reality. The money from taxes is not the governments money and then is "spent" for cuts. It is the citizen's money that is taken at a smaller amount. Spinning tax cuts as spending is a classic left wing tactic.

Finally, using a story from Newsweek or the Daily Beast to defend Obama is like using a story from Sean Hannity to defend Bush. Left wing bias is the norm at Newsweek. This whole story is has no credibility. It just fits the template of the liberal agenda.

I would also like to add that the "health care bill" was set up so that most of the spending would begin after he leaves office. Also to build a high speed rail system, where would that money come from? To say he doesn't believe spending is the way out of everything is to show complete ignorance for reality.

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No matter how you word it, keeping present rates, is not a tax cut.

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That was the biggest load of crap in that article.

People who complain about the deficit are generally the same as those who liked the tax cuts.

It makes no sense. Deficits are the result of too much spending and not enough tax revenue. It is simple math that our government can't do.

Until the politicians stop the nonsense and address spending and taxes the deficit will continue.

just clicking


Republicans are not conservatives...those who say they are..are lying...that is a fact.

Republicans continue to play politics with the budget, pushing their agenda rather than what is best for the country.

Now it is up to the goptea party to show Americans how they are going to pay for their spending.

web page

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People who complain about the deficit are generally the same as those who liked the tax cuts.

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Big shocker there... those with jobs and income want to pay lower taxes because they are the ones who actually pay taxes.. they also want the government to be more responsible with the money we send them, cut spending and reduce the deficit..

Those without jobs just want the government checks to keep coming, don't care where or how its being funded, they just want to know they are getting a check, some food stamps, free housing, etc.. they don't care if the money is being borrowed and creating a deficit to fund their life... it's not like THEY will be the ones who have to pay it back.