Fiscal Fact Checker: How Much Has Spending Increased Under President Obama?

Update: The text has been updated to include spending growth numbers for President Bush excluding financial rescue programs.

An article by Rex Nutting on MarketWatch claiming the "Obama spending binge never happened" lit up publications across the Internet last week. Nutting claims that spending under President Obama has only increased at 1.4 percent annually in his first term (through FY 2013), lower than any president since Dwight Eisenhower. Not surprisingly, numerous disputes have arisen over the methodology, who deserves blame for what, what measures should be used, and what the article means. Even two main fact checkers, Politifact and the Washington Post's Glenn Kessler, are split on the claim's accuracy.

Overall, we think Nutting's methodology is technically accurate, but the numbers are somewhat misleading. There are myriad ways to break down the numbers, which we discuss below.

To check the claim, we have produced our own numbers by presidency going back to the Kennedy Administration, measuring annual spending growth in a number of ways. They are:

  • Nominal growth of total spending
  • Inflation-adjusted (real) growth of total spending
  • GDP-adjusted growth of total spending
  • Real growth of primary (non-interest spending)
  • Real growth of total spending excluding automatic stabilizers
Annual Spending Growth by Administration
  Total Spending Primary Spending Non-Stabilizer Spending
Administration Nominal Growth Real Growth GDP-Adjusted Growth Real Growth Real Growth
Kennedy/Johnson 8.2% 5.4% 0.6% 4.4% 5.6%
Nixon/Ford 10.5% 3.8% 0.9% 3.8% 3.4%
Carter 14.1% 2.8% 2.3% 2.7% -1.1%
Reagan 6.5% 2.6% -0.8% 0.6% 2.7%
Bush I 5.4% 1.5% 0.3% -2.3% 1.4%
Clinton 3.5% 0.9% -2.0% -0.6% 0.9%
Bush II 7.8% 5.2% 3.7% 4.5% 5.0%
Obama* 2.4% 0.3% -0.9% -1.4% -0.2%

Sources: CBO, OMB, Bureau of Labor Statistics, CRFB calculations
*Uses President's budget spending for FY 2012 and 2013

In terms of nominal and real total spending growth, the measures that Nutting used, President Obama does have the lowest growth of any president since the Eisenhower Administration. Our growth numbers are somewhat higher than his, though, due to our use of President's budget spending for FY 2012 and FY 2013. In the three other measures, the President comes in at the second lowest growth mark.

One point of controversy in the MarketWatch article is that he assigns the FY 2009 spending level largely to President Bush, since much of the budget was already determined before the presidency changed hands and a lot of the 2009 spending increase was due to automatic stabilizers in the budget increasing as the economy deteriorated in late 2008 and through 2009. Of course, there is some spending -- the 2009 stimulus, the Children's Health Insurance Program (CHIP) reauthorization, and the March 2009 continuing resolution -- that President Obama initiated that had effects in 2009, which Nutting appropriately assigns to him in 2010. Then he measures the increase from 2009 to 2013.

Assigning this spending to 2010 does help make the numbers more fair, but it doesn't correct for all of the problems. Perhaps most significantly, certain financial programs -- the Troubled Asset Relief Program (TARP), the takeover of Fannie Mae and Freddie Mac, and FDIC efforts to help banks -- registered more than $250 billion of spending in 2008 and 2009, but those have since tapered off to about $10 billion. These programs are charged to President Bush, which makes sense since he passed TARP and the Fannie/Freddie conservatorship, but they are also built into President Obama’s "base" so that he gets credits as these programs naturally unwind. Excluding these three programs yields somewhat higher spending growth, annualized at 4.5 percent (or 2.5 percent after adjusting for inflation). Spending growth rates of that size would no longer give Obama the lowest growth rates.

Spending Under President Obama Excluding Financial Programs (billions)
  2009* 2010* 2011 2012^ 2013^ 2009-2013 Annual Growth
Nominal Outlays $3,112 $3,692 $3,639 $3,594 $3,708 4.5%
Outlays in 2009 Dollars $3,112 $3,659 $3,483 $3,437 $3,423 2.5%

Source: CBO
*Obama spending initiatives with costs in 2009 are shifted to 2010
^Reflects President's budget spending

One could also do the same for President Bush. However, one could assign the 2009 spending for the Fannie/Freddie conservatorship to President Bush, since it did pass during his presidency. If you include Fannie/Freddie but exclude TARP and the FDIC, the nominal and inflation-adjusted growth rates would be 7 and 4.5 percent, respectively. If you exclude Fannie/Freddie as well, doing the same thing as was done for President Obama above, the nominal and real growth rates would be 6.7 and 4.1 percent, respectively.

Some conservatives have argued (see here for example) that measures of spending growth are much less relevant than the levels of actual spending. Even if President Obama came into office at a time when spending was set to swell due to the recession, he kept those inflated levels of spending throughout the budget. To some extent, that is true. Although spending will continue declining as a percent of the economy after the economy recovers, it will never get down to pre-2009 levels. The Affordable Care Act is the main Obama-specific factor that permanently raises spending over the longer term. Still, there are also demographic factors that will automatically push spending up above their historical levels.

In short, Nutting's article may be technically accurate from one perspective on how much spending growth there has been under President Obama, but it likely understates that amount by including the reductions that automatically occurred in financial crisis-related programs such as TARP.

Overall, though, the article and the ensuing controversy miss the bigger point. Assigning blame or credit to presidents ignores the fact that they must work with an entire Congress to pass legislation. In addition, their budgets can be significantly affected by the decisions of previous Congresses and presidents. The blame game is much less important than trying to find a bipartisan solution to our budget problems.

Misses the point!

The point is that Obama has consistently indicated he has no problem with spending vastly more than the government takes in.   Under any economic criterion this will inevitably lead to financial ruin.   His latest budget proposal contemplates major increases in both spending and taxes. Even if real, which past history suggests they are not, his proposals for any reductions in spending are miniscule.

You miss the point!

He didn't increase spending. The FOX News fueled myth that Obama is reclessly spending us into oblivion is fiction. The bush tax cuts plus the new spending that Bush enacted were inevitably going to lead to this situation. Even the least flattering way of calculating the growth of spending under Obama puts him at less than half the growth rate of President Bush. Scroll back up and read the article.

So why are we 6 trillion $

So why are we 6 trillion $ deeper in debt since o took office? Does this not bother you?

 

You can't continue to spend 40% more than you take in....

Bacause that spending was already planned....

...and it had nothing to do with the President. He didn't spend more. Deal with it.

Obama Care

Hmmmm... planned spending from prior administration.. I think not. 

 Its called math. If you

 Its called math. If you increase spending a ton and decrease taxes, what Bush did, it creates whats called a deficit. A deficit is when you spend more money than what you take in. Deficits create debt. If Obama keeps spending flat, meaning no increase or decrease, and doesn't raise taxes the debt increases each year by the amount of the deficit. The important number is not the debt its the deficit. You remember that thing that Clinton turned into whats called a surplus? Well Bush wasted it and the republicans are trying to convince everyone that its Obama's fault. You're the one that bought it. Congrats!

math ... and the rate

Actually the rate the debt increases is just as important as the deficit numbers ... both should be equal, but maybe not, when "they" try to hide things.

 

Obama has inherited some good things from Bush Jr. (well from a budget perspective) such as TARP, which, I think is in the positive and has been for some time... like ALL Presidents they do get good and bad from the previous administrations (and Congress)...  Obama did not "need" to extension QE every year ... or maybe he did, but I though Bush Jr spent recklessly during the start of the wars, but he was reacting to (in theory) the failure of the CIA and FBI to do their job (and stop 911), but then they often fail.  >> I'm sure they also succeed, but I find it odd they fail so spectacularly --- and this is a whole other topic ---  and we end up paying the price for Oklahoma City Bombing, World Trade Center Bombing '93, US Embassy Bombings in Africa '98 .. and so on ... <<

 

Many would argue we should not have invaded one or the other or either counties (Iraq & Afghanistan), yet I think at least one war was a given and the other did have some merits...  so Really, what are the Obama apologists complaining about?

 

Again, Bush Jr spent too much and Obama is spending a whole lot more.

 

The Federal Reserve will just keep printing more money!!!

    We have never paid off the debt.   It is imposible to pay off the debt because when they took us off the gold standard. The federal reserve charged the govt. 7 cents for every dollar it printed.   So for every dollar made, from day one, we are 7 cents in the hole. 

The Budh Adminidtration blew up the Econmomy

The Bush admin repeatedly sold treasuries to China. He didn't raise taxes or cut programs. He sold treasuries to China for the medicare donut hole. He didn't raise taxes to pay for the unfunded war on Iraq and Afghanistan. He pushed the massive Bush tax cuts by again selling treasuries to China.. History tells you that you must raise taxes to pay for war. The CBOE estimated in 2002 it would cost

upwards of 4 trillion to fund the wars in Iraq and Afghanistan.The American people will be paying

for these wars for the next 20 years.The Obama admin is paying the bills that Bush -Cheney ran up.If you think that the Obama admin will be able to pay off  this tab off in 4-8 years you are simply clueless when it comes to econmics.You have a computer and access to the internet. Do your own due diligence.

so why ha sthe national debt

so why ha sthe national debt gone up 6 trillion dollars in the last 4 years? No matter what your answer...we are on the road to bankruptcy when you spend 40% more than we take in.

Debt went up in part because economy tanked

An important contributor to the Natl Debt going up in the last 4 years is that the economy taqnked just as Bush was leaving office, leading to vastly reduced tax revenues, and increased spending on social programs, corporate and bank bailouts, while the fur fixed costs associated with the war, Natl debt interest, etc. did not diminish.

 

Note that these two wars were fought without a tax increase to pay for them.  The money was borrowed.  In fact, taxes were cut during this period.  No previous (this century) was fought without tax increases.  And note that much of the period of these wars were prerecession.  I mean, if you can't even pay for a way during economic "good times", but decide to borrow instead, how can you justify that?

Why deficit increased

The deficit has increased because Bush's last budget left us an annual deficit of about 1.3 trillion a year and Republicans blocked any budget that would reduce the deficit. 1.3*4= 5.2 trillion. Some spending increases are mandatory. If Republicans were truly serious about cutting spending they'd start by cutting hundreds of billions of dollars wastefully handed out in the form of corporate welfare

Obamacare

This DEBT will this impact the future Presidents more than any of the past spending. And this adiministration is resposible for contuning to rollover the budget since Obama took office.

 

The story being told

   The Republicans and Fox News have an agenda to bad mouth Obama on every turn. But the American people are not that dumb to fall for these made up stories. Well, some people do fall for it because they want to believe it. Notice how all their fear tactics are about what he's going to do or about how things are going to go so bad. Never about what IS or about what actually DID happen because when they do it can be easily fact checked, like this mess.

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