Recent news dropped that just about flies in the face of the GOP narrative on President Obama’s handling of the public trust. As it turns out, federal spending, taxes, and the deficit are all lower today than they were when President Obama assumed office in January 2009.
Michael Linden, the Director for Tax and Budget Policy at the Center for American Progress, puts it this way on ThinkProgress:
“In January 2009, before President Obama had even taken the oath of office, annual spending was set to total 24.9 percent of gross domestic product. Total spending this year, fiscal year 2012, is expected to top out at 23.4 percent of GDP.
Here’s another interesting fact. Taxes today are lower than they were on inauguration day 2009. Back in January 2009, the CBO projected that total federal tax revenue that year would amount to 16.5 percent of GDP. This year? 15.8 percent.
One last nugget. The deficit this year is going to be lower than what it was on the day President Obama took office. Back then, the CBO said the 2009 deficit would be 8.3 percent of GDP. This year’s deficit is expected to come in at 7.6 percent.”
Its news that makes it that much more difficult for presumptive Republican nominee Mitt Romney and the GOP to say that there is a deficit problem, using that as the talking point of the election cycle for their economic arguments. While the national debt has risen under President Obama, the bulk of the debt is the result of policies initiated under the previous George W. Bush administration.
In essence, President Bush did the old dine and dash, leaving the next President (or rather the tax paying public) to pick up the tab.
The main causes of the deficit have been the wars in Iraq and Afghanistan along with the cost of the Bush tax cuts. Also, President Obama extended the Bush tax cuts back in December 2010 – much to the chagrin of more liberal Democrats who wanted to see these cuts expire.
So the issue of fiscal responsibility in this campaign season will largely be one of perception. At this point, the buck stops with President Obama, but now the data is in his favor that spending, taxes and the deficit are lower now than when he took office. While he can point to the financial situation he inherited from President Bush, many voters aren’t going to be appeased by that explanation especially as the recovery has been slow.
However, it will be harder for Mitt Romney to paint President Obama as being fiscally irresponsible given the circumstances. For voters who remember that President Bush came into office with a $281 billion budget surplus and left with a $1.2 trillion deficit, they may end up being more sympathetic to President Obama’s predicament.