Wash. Times claims Obama is "killing the economy" by falsely attributing entire FY09 deficit to "his ruinous policies"
Research ››› ››› JUSTIN BERRIER
In a January 18 editorial entitled "Obama is Killing the Economy," The Washington Times claimed that "Barack Obama has the worst budget record of any president in American history" by comparing the Congressional Budget Office's (CBO) projections of the FY 2009 deficit to the smaller FY 2008 deficit. In fact, only a small portion of the fiscal year 2009 deficit is due to Obama's policies; in January, before he took office or signed any legislation, CBO projected that, based on policies set under President Bush and economic conditions at the time, the deficit for fiscal year 2009 would reach $1.2 trillion.
Wash. Times uses deficit falsehood to accuse Obama of having the "worst budget record of any president"
Wash. Times: Obama has the worst budget record of any president in American history. In a January 18 editorial, The Washington Times accused President Obama of "hav[ing] the worst budget record of any president in American history" and wrote that the FY 2009 budget, which it called "Mr. Obama's budget," is "the most irresponsible in history." As evidence, the Times claimed that "the 2009 budget deficit tripled over 2008. The deficit as a percentage of gross domestic product went from 3.1 percent in 2008 to 9.9 percent in 2009. The deficit for the first month of fiscal year 2010 was $176 billion, which was greater than the $161 billion deficit for the entire 2007 fiscal year."
In fact, estimates of the deficit were made before Obama took office, and are mainly attributed to Bush policies
$1.2 trillion projection based on legislation passed under Bush before Obama's inauguration. CBO projected on January 7 that, including spending authorized under the Bush administration for the Troubled Asset Relief Program (TARP) and government takeovers of Fannie Mae and Freddie Mac, the deficit would total $1.2 trillion. From CBO's January 2009 budget report, released on January 7:
The ongoing turmoil in the housing and financial markets has taken a major toll on the federal budget. CBO currently projects that the deficit this year will total $1.2 trillion, or 8.3 percent of GDP. That total, however, does not include the effects of any future legislation. Enactment of an economic stimulus package, for example, would add to the 2009 deficit. In any event, as a percentage of GDP, the deficit will most likely shatter the previous post-World War II record high of 6.0 percent posted in 1983.
A drop in tax revenues and increased federal spending (much of it related to the government's actions to address the crisis in the housing and financial markets) both contribute to the robust growth in this year's deficit. Compared with receipts last year, collections from corporate income taxes are anticipated to decline by 27 percent and individual income taxes by 8 percent; in normal economic conditions, they would both grow by several percentage points. In addition, the estimated deficit includes outlays of more than $180 billion to reflect the cost of transactions of the TARP.
The projected deficit for 2009 also incorporates CBO's estimate of the cost to the federal government of the recent takeover of Fannie Mae and Freddie Mac. Because those entities were created and chartered by the government, are responsible for implementing certain government policies, and are currently under the direct control of the federal government, CBO has concluded that their operations should be reflected in the federal budget. Recognizing the cost of the takeover adds about $200 billion (in discounted present-value terms) to the deficit this year, reflecting the long-term net cost of the more than $5 trillion in credit guarantees issued and loans held by those entities at the start of the fiscal year. In addition, the cost of Fannie Mae's and Freddie Mac's new credit activity in 2009 will total $38 billion, CBO estimates.
New York Times: Obama policies are "responsible for only a sliver of the deficits." According to a budget analysis done 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 FY2008 and FY2009 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."