Obama's Real Spending Record
June 20, 2012
President Obama recently claimed that during his tenure as president federal spending had risen at the lowest pace in nearly 60 years. In reality, spending skyrocketed under both Presidents Bush and Obama, say economists Arthur Laffer and Stephen Moore.
Sadly for fiscal conservatives, the biggest surge in government spending came during the last two years of President George W. Bush's eight years in office. A weakened Republican president dealing with a strident Democratic Congress, led by then-House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid, saw federal expenditures rise dramatically.
- Large Bush expenses include the $700 billion Troubled Asset Relief Program (TARP), the bailout of insurance giant AIG and government-sponsored lenders Fannie Mae and Freddie Mac, and the ill-advised 2008 $600-per-person tax rebate.
- From the second quarter of 2007 to the second quarter of 2009 when President Obama assumed office, government spending skyrocketed to 27.3 percent of gross domestic product (GDP) from 21.4 percent of GDP.
- This amounts to the fastest peacetime growth in government spending in history.
This glut of spending continued under President Bush's successor. President Obama has continued spending enormous amounts on bloated government policies while taking advantage of accounting techniques afforded by the repayment of TARP loans.
- After taking office in 2009 with already record-setting deficits, President Obama proceeded to pass his own $830 billion stimulus, auto bailouts, mortgage relief plans, the Dodd-Frank financial reforms and the $1.7 trillion ObamaCare entitlement.
- While spending did come down in 2010, it wasn't the result of spending cuts but rather because TARP loans began to be repaid, and that cash was counted against spending.
- In 2011 and 2012, the pace of spending was slowed when a new emboldened breed of Republicans took back the House promising to end the binge.
- The House Budget Committee, for example, has identified about $150 billion of new spending Mr. Obama wanted in 2011 and 2012 that Republicans would not approve.
Recognized in this light, the president's claim of low spending and responsible government seems strikingly disingenuous.
Source: Arthur B. Laffer and Stephen Moore, "Obama's Real Spending Record," Wall Street Journal, June 12, 2012.
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