On his radio show, Sean Hannity claimed that President Obama "seems to be concerned about a massive deficit," which Hannity said Obama "created," and asserted that the economic "stimulus is a failure." In fact, the 2009 increases in spending and the deficit include the impact of policies enacted under former President Bush, and economists have estimated that the stimulus "raised employment" by as many as 2 million jobs through December 2009.
From the January 28 edition of ABC Radio Networks' The Sean Hannity Show:
HANNITY: He lies about the Supreme Court decision in the Citizens United case. I think the biggest lie of the night, "Well, we saved 2 million jobs." You've lost 4 million jobs. You know, he seems to be concerned about a massive deficit -- he created it. You know, a guy that, you know, believes the federal government should run pretty darn near everything in your life -- the auto industry, the banks, the insurance companies, student loans, health care, and it never ends.
What is appalling is the massive ego of this president, which was on full display last night, taking responsibility for nothing, learning nothing. It's arrogant. He's cold, he seems detached, and literally is insisting on dragging this nation off a cliff. And his stimulus is a failure, so we'll spend $30 million more on the stimulus.
Fact: Policies enacted before Obama took office comprised much of FY 2009 spending increase
CBO: TARP, Fannie, Freddie commitments comprised much of spending increase in FY 2009. CBO stated in its January 2010 Budget and Economic Outlook that "[m]uch of the rise in outlays in 2009 came from mandatory programs." CBO added, "Three initiatives accounted for nearly two-thirds of that increase. Outlays recorded for the Troubled Asset Relief Program (TARP) totaled $152 billion in 2009; net payments to Fannie Mae and Freddie Mac accounted for another $91 billion; and fiscal stimulus legislation, the American Recovery and Reinvestment Act of 2009 (ARRA), increased mandatory outlays by $80 billion." Spending for TARP and the Fannie and Freddie conservatorship was approved before Obama was elected.
$1.2 trillion of $1.4 trillion deficit was already projected before Bush left office. On January 7, 2009, CBO stated in its Budget and Economic Outlook that "[w]ithout changes in current laws and policies, CBO estimates, outlays will rise from $3.0 trillion in 2008 to $3.5 trillion in 2009." This estimate included $240 billion -- in contrast to the $91 billion recorded at the end of fiscal year 2009 -- for "incorporating the two housing GSEs into the federal budget." Before Obama took office or signed any legislation, CBO had estimated that the deficit would be $1.2 trillion for fiscal year 2009.
Spending for unemployment benefits, Medicaid increased as result of recession. CBO also stated of fiscal year 2009:
Social Security outlays rose by 9 percent ($53 billion) last year, primarily because the 5.8 percent cost-of-living adjustment that took effect in January 2009 was the largest annual adjustment since 1982. Medicaid spending (excluding stimulus funding) increased by 9 percent ($18 billion) in 2009 -- exceeding its 7 percent average annual growth rate of the previous 10 years -- largely because higher unemployment boosted enrollment in the program. Medicare outlays (including an offset for premium payments) also rose at a faster rate than the average of the past decade, growing by 10 percent ($39 billion).
In addition, payments for unemployment benefits rose by $76 billion in 2009, pushing outlays for that program to more than double the level recorded in 2008. The jump was caused by substantially higher unemployment as well as increased and extended benefits to unemployed workers ($27 billion from ARRA and $17 billion from other legislation).
New York Times: Obama policies are "responsible for only a sliver of the deficits." According to a budget analysis by The New York Times, "Mr. Obama's main contribution to the deficit is his extension of several Bush policies, like the Iraq war and tax cuts for households making less than $250,000. Such policies -- together with the Wall Street bailout, which was signed by Mr. Bush and supported by Mr. Obama -- account for 20 percent" of the increase between the FY 2008 and FY 2009 budget deficit estimates. The New York Times wrote that 70 percent of the increase is attributed to a combination of economic hardships, including "the fact that both the 2001 recession and the current one reduced tax revenue, required more spending on safety-net programs and changed economists' assumptions about how much in taxes the government would collect in future years" and "new legislation signed by Mr. Bush ... like his tax cuts and the Medicare prescription drug benefit."
Fact: Economic analysts estimate the recovery act increased relative employment by as many as 2 million jobs
Economists estimate stimulus "raised employment" by as many as 2 million jobs through December 2009. In a quarterly report issued January 13, the White House Council of Economic Advisers estimated: "As of the fourth quarter of 2009, the CEA estimates that the American Recovery and Reinvestment Act has raised employment relative to the baseline by between 1½ and 2 million. The CEA estimates for both the effects on GDP and employment are similar to those of respected private forecasters and government agencies." The CEA cited Moody's Economy.com estimates that the stimulus increased employment by 1.6 million jobs through the fourth quarter of 2009. From the CEA's quarterly report: