In his Wall Street Journal column, Karl Rove ignored the Bush administration's responsibility for the 2009 budget to attack the Obama administration over deficits. Rove also ignored several economic analyses that estimated relative employment increases under the stimulus in order to claim that the stimulus failed.
Rove argues Bush's fiscal responsibility ended January 20, 2009
From Rove's January 21 Wall Street Journal column:
Mr. Axelrod wrote that no one is entitled to his own facts, even as he argued that George W. Bush is responsible for Barack Obama's deficits. He argued that Mr. Bush forced the hand of this administration by leaving office in the midst of a sharp recession.
That argument won't fly for two reasons. First, at some point this administration has to take responsibility for itself. It's also not even close to accurate. Consider that from Jan. 20, 2001, to Jan. 20, 2009, the debt held by the public grew $3 trillion under Mr. Bush -- to $6.3 trillion from $3.3 trillion at a time when the national economy grew as well.
By comparison, from the day Mr. Obama took office last year to the end of the current fiscal year, according to the Office of Management and Budget, the debt held by the public will grow by $3.3 trillion. In 20 months, Mr. Obama will add as much debt as Mr. Bush ran up in eight years. [The Wall Street Journal, 1/21/10]
Based on Bush's actions and economic conditions, CBO projected $1.2 trillion deficit for 2009 before Obama took office
$1.2 trillion projection based on legislation Bush passed before Obama's inauguration. In a budget report released on January 7, 2009, the Congressional Budget Office (CBO) stated, “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.” CBO further stated, “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.”
PolitiFact: “A third of the 2009 fiscal year had passed before Obama even took office.” In assessing an earlier Rove claim -- that the Obama administration “will run up more debt by October than Bush did in eight years” -- PolitiFact.com stated that “debt rose by $2.5 trillion during the Bush years from 2001 through 2008; and it is expected to rise $3 trillion in the two years under Obama. But Rove's equation assumes Obama is responsible for all of the debt accumulated in 2009 and 2010.” PolitiFact further stated that “the spending for 2009 was largely determined by a Congress controlled by Democrats and a Republican president,” and noted, “The Congressional Budget Office estimated that the Obama administration inherited a deficit of more than $1.2 trillion the day it walked in the door.”
Rove ignored estimates of relative employment increase credited to stimulus to say “the stimulus failed miserably”
Rove: Obama said stimulus “would create 3.7 million jobs,” but by “Obama's standards, the stimulus failed miserably.” In his column, Rove stated, “Mr. Axelrod claims the pork-laden stimulus package has been a success. But Mr. Obama told Americans that if it were passed, unemployment wouldn't rise above 8%. It is now 10%. The president also said it would create 3.7 million jobs, 90% of which would be in the private sector. By Mr. Obama's standards, the stimulus failed miserably.”
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 ARRA 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:
CBO undermines Rove's suggestion that health care reform will add to future deficits
Rove suggests health care reform will increase the federal deficit. In his column, Rove stated, “Mr. Axelrod boasts Mr. Obama's proposed health reforms will 'not add to the federal deficit.' But if that turns out to be true, it will only be because Massachusetts voters just elected a senator who promises to vote against those reforms.”
CBO estimated House and Senate bills will reduce deficits. The CBO found that both the health care reform bill that passed the House on November 7, 2009, and the Senate bill that incorporated the manger's amendment would yield deficit reductions over the 2010-2019 period and in the decade after 2019.