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Capitol Comment

MarketWatch Says Obama's Spending Binge Never Happened, Keeps Straight Face

Just when you thought media bias couldn't possibly be more blatant, along comes this article from MarketWatch, a purportedly trusted source of Wall Street news. (Never mind that MarketWatch is operated by CBS, who should change their acronym to Cooing Barack Supporters ... but I digress).

This article so blatantly misrepresents the facts that it's difficult to know where to start:

By Rex Nutting, MarketWatch

WASHINGTON (MarketWatch) — Of all the falsehoods told about President Barack Obama, the biggest whopper is the one about his reckless spending spree.

As would-be president Mitt Romney tells it: “I will lead us out of this debt and spending inferno.”

Almost everyone believes that Obama has presided over a massive increase in federal spending, an “inferno” of spending that threatens our jobs, our businesses and our children’s future. Even Democrats seem to think it’s true.

Government spending under Obama, including his signature stimulus bill, is rising at a 1.4% annualized pace — slower than at any time in nearly 60 years.

But it didn’t happen. Although there was a big stimulus bill under Obama, federal spending is rising at the slowest pace since Dwight Eisenhower brought the Korean War to an end in the 1950s.

Even hapless Herbert Hoover managed to increase spending more than Obama has.

Here are the facts, according to the official government statistics:

In the 2009 fiscal year — the last of George W. Bush’s presidency — federal spending rose by 17.9% from $2.98 trillion to $3.52 trillion. Check the official numbers at the Office of Management and Budget.

In fiscal 2010 — the first budget under Obama — spending fell 1.8% to $3.46 trillion.

In fiscal 2011, spending rose 4.3% to $3.60 trillion.

In fiscal 2012, spending is set to rise 0.7% to $3.63 trillion, according to the Congressional Budget Office’s estimate of the budget that was agreed to last August.

Finally in fiscal 2013 — the final budget of Obama’s term — spending is scheduled to fall 1.3% to $3.58 trillion. Read the CBO’s latest budget outlook.

I've even seen Tea Party members start to panic - "ZOMG IT WAS BUSH'S FAULT!"

I'll tackle the first section before I post the second section with rebuttal. It's pretty basic, really. The rate of growth in spending is NOT equivalent to spending as an overall percentage of GDP. This is a selective look at statistics without giving the overall context. Yes, the rate of growth has leveled off. But ONLY after spending was raised to unsustainable levels!

But the second argument is even more powerful. The Bush budgets - you remember, back in the day, when we actually passed budgets - never exceeded $2.5 Trillion, and deficit spending never exceeded $500 Billion. DEFICIT SPENDING HAS MORE THAN DOUBLED SINCE OBAMA TOOK OFFICE. Overall spending has increased by upwards of 50% since 2006, when the Democrats took control in Congress and the Senate. This chart is from the White House website:




(in millions of dollars)
ReceiptsOutlaysSurplus or Deficit (–)ReceiptsOutlaysSurplus or Deficit (–)ReceiptsOutlaysSurplus or Deficit (–)
2012 estimate2,468,5993,795,547-1,326,9481,896,4593,290,381-1,393,922572,140505,16666,974
2013 estimate2,901,9563,803,364-901,4082,224,5453,169,287-944,742677,411634,07743,334
2014 estimate3,215,2933,883,095-667,8022,472,8543,167,901-695,047742,439715,19427,245
2015 estimate3,450,1534,059,866-609,7132,669,2973,298,248-628,951780,856761,61819,238
2016 estimate3,680,0854,328,840-648,7552,847,2733,519,901-672,628832,812808,93923,873
2017 estimate3,919,2754,531,723-612,4483,038,1283,672,539-634,411881,147859,18421,963
* $500 thousand or less.


James Pethokoukis reframes this even more starkly on his blog:

Actually, the Obama spending binge really did happen

As the chart indicates, Nutting arrives at that 1.4% number by assigning 2009—when spending surged nearly 20%—to George W. Bush: “The 2009 fiscal year, which Republicans count as part of Obama’s legacy, began four months before Obama moved into the White House. The major spending decisions in the 2009 fiscal year were made by George W. Bush and the previous Congress. Like a relief pitcher who comes into the game with the bases loaded, Obama came in with a budget in place that called for spending to increase by hundreds of billions of dollars in response to the worst economic and financial calamity in generations.”

Let me complete the metaphor for Nutting: “Then as those runners scored, Obama kept putting more on base.”

Obama chose not to reverse that elevated level of spending; thus he, along with congressional Democrats, are responsible for it. Only by establishing 2009 as the new baseline, something Republican budget hawks like Paul Ryan feared would happen, does Obama come off looking like a tightwad. Obama has turned a one-off surge in spending due to the Great Recession into his permanent New Normal through 2016 and beyond.

So, the author took 2009 and lumped it in with Bush (BLAME BUSH!) and failed to separate out the Omnibus Spending Bill of 2009, TARP, and the Stimulus. No biggie. You see, here's the whole point of Democrat budgeting. This is one of the oldest tricks in their book. They raise the baseline spending by whatever means necessary - emergency spending usually does the trick because a giant increase in a proposed budget generally doesn't garner a lot of votes on the floor. All of the increased spending rate occurs in one event, instead of a series of budgets passed over several years. Once the baseline is raised, that's the new normal, and future budgets (if they're ever actually, you know, passed) work from the previously established precedent of higher spending. Plus that makes it easier to blame the last president for all of your spending malfeasance. At this point in the budget approval process, if someone is sharp enough to pick up on their little trick, they typically come back with something that sounds a lot like, "But, it's for the CHILLLLDRENNNNN!"

Ok now let's tackle the second chart in this article. This is where the author really shows how stupid he thinks his readers (and Obama sycophants) really are.

The big surge in federal spending happened in fiscal 2009, before Obama took office. Since then, spending growth has been relatively flat.

Over Obama’s four budget years, federal spending is on track to rise from $3.52 trillion to $3.58 trillion, an annualized increase of just 0.4%.

There has been no huge increase in spending under the current president, despite what you hear.

Why do people think Obama has spent like a drunken sailor? It’s in part because of a fundamental misunderstanding of the federal budget.

Do you notice something funny? That supposed lowest spending ever year, 2012? Doesn't that bar seem like it's taller than the other ones? Sure seems like that means spending is higher, not lower. Take 2009 and blame it on your predecessor, if pressed on the issue say that you inherited this mess from him, put it all in a blender for maximum spin, and voila! You're not a drunken sailor anymore!

The disrespect for the voters in these budget games never ceases to amaze. In fact, they seem to raise the baseline every time they open their mouths.

Colin M

"So, the author took 2009 and lumped it in with Bush (BLAME BUSH!) and failed to separate out the Omnibus Spending Bill of 2009, TARP, and the Stimulus."

I agree, 2009 belongs to Obama. It doesn't change the fact that Obama has increased spending much, much LESS than Bush. The numbers don't lie.

"Yes, the rate of growth has leveled off. But ONLY after spending was raised to unsustainable levels!"

In each of his two terms, Bush increased spending more than Obama did in his first.

"The Bush budgets - you remember, back in the day, when we actually passed budgets - never exceeded $2.5 Trillion"

Clearly he blew his budget, then. And what is magic about the number 2.5 trillion? Outlays under Clinton never exceeded 2.0 trillion, or even 1.8 trillion.

"and deficit spending never exceeded $500 Billion"

Your bar is mighty low. He inherited a $128 billion surplus.


That's a function of reduced revenue due to the recession, not because of increases in spending. Spending increased *dramatically* more during both of Bush's terms, than in Obama's first. Spending itself--not deficit spending, but raw spending, in absolute terms--more than doubled under Bush. The increase under Obama pales by comparison.

"Overall spending has increased by upwards of 50% since 2006, when the Democrats took control in Congress and the Senate. "

That's simply false. From 2006 to 2012, nominal spending increased 33%--and only 18% when adjusted for inflation. By contrast, from 2000 to 2006, spending increased 48% (24% adjusted for inflation). And from 1994 to 2000? 22%, (9% in real $). No matter which way you slice it, Bush's spending increases outstrip Obama's--and they *vastly* outstrip Clinton's!

"Do you notice something funny? That supposed lowest spending ever year, 2012? Doesn't that bar seem like it's taller than the other ones? Sure seems like that means spending is higher, not lower."

Um. Look at the actual numbers, not the picture?

Nowhere in the article does he say 2012 was the "lowest spending year ever." But it is lower than 2011. And 2010 was lower than 2009. Two year in one term with an actual decrease in spending--not just a decrease in the rate of increase, but an absolute decrease--is something that hasn't happened since the Eisenhower administration.

Colin M

That post is supposed to be broken into paragraphs.

The takeaway point is that the Republican's rhetoric about the Dems fiscal profligacy is quite rich. The Dems may indeed be fiscally profligate, but the Republicans are FAR more so. The facts destroy the myth.

Ronald Reagan

Mr. Reynolds,

You do your opinion piece a great disservice when you blast Marketwatch for being operated by CBS(as if that were a bad thing). In fact, if you just took a second to read the article on Marketwatch's website you would see that it is WHOLLY OWNED by the Wall Street Journal(which itself is WHOLLY OWNED by News Corp!!).

Given your tried to discredit the Marketwatch piece by associating it with a news organization you feel has a liberal bias, the opposite must be true that if it was written by a conservative organization like the Wall Street Journal, the facts must be more damning to you than if they had came from CBS.

So, be more careful before you blast the messenger.

I hope you update your piece to reflect the fact I just brough to your attention.

- R. Reagan

Ronald Reagan

One more thing, Mr. Reyanolds, the conservative fact-checking organization Politi-Fact disagrees with you because they find that the facts as outlined in the Marketwatch article are TRUE.

Politifact says: "Obama has indeed presided over the slowest growth in spending of any president using raw dollars, and it was the second-slowest if you adjust for inflation. The math simultaneously backs up Nutting’s calculations and demolishes Romney’s contention."

When you are confronted with facts that destroy your agenda you are better served to go into hiding than spew poorly-written fiction thats that makes yoru cause look even worse.

You can read for yourself on Politifact's website, or Google it.