Quick Fact: Wallace claims Obama "participant ... in building up" trillion-dollar deficits over last year
Previewing President Obama's State of the Union address on Fox Broadcasting Co., Chris Wallace asserted that Obama was "a participant in the last year in building up" "multi-trillion-dollar deficits." In fact, the FY 2009 deficit, which totaled $1.4 trillion, was already estimated to be $1.2 trillion when Obama came into office and "virtually the entire deficit over the next ten years" are due either to policies implemented under President Bush or to the recession, which began during Bush's tenure, according to the Center on Budget and Policy Priorities.
From Fox Broadcasting Co.'s coverage of the 2010 State of Union address:
WALLACE: Fully two-thirds of this speech is going to be devoted to the economy, to putting people back to work, also to dealing with the deficit -- trying to get down these multi-trillion-dollar deficits that in fact he has been a participant in the last year in building up.
FACT: Majority of FY 2009 deficit attributed to Bush policies
$1.2 trillion of $1.4 trillion deficit was already projected before Bush left office. The CBO projected on January 7, 2009, that, including spending authorized under the Bush administration for the Troubled Asset Relief Program (TARP) and government takeover of Fannie Mae and Freddie Mac, the deficit would total $1.2 trillion. According to the CBO, the actual FY 2009 deficit was $1.4 trillion.
NY 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 analysis also stated that 70 percent of the increase is due 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: Wars in Iraq and Afghanistan, Bush tax cuts contributed significantly to debt
CBPP: "[T]he tax cuts enacted under President George W. Bush, the wars in Afghanistan and Iraq, and the economic downturn together explain virtually the entire deficit over the next ten years." In a December 16, 2009, analysis of federal deficits, the Center on Budget and Policy Priorities stated, "Some critics charge that the new policies pursued by President Obama and the 111th Congress generated the huge federal budget deficits that the nation now faces. In fact, the tax cuts enacted under President George W. Bush, the wars in Afghanistan and Iraq, and the economic downturn together explain virtually the entire deficit over the next ten years." CBPP included the following chart illustrating various factors' relative effects on current and projected deficits: