Friday, October 31st, 2014

GOP Pledge-O-Meter

Cut government spending to pre-stimulus, pre-bailout levels


Will "roll back government spending to pre-stimulus, pre-bailout levels, saving at least $100 billion in the first year alone."


Updates

Spending has risen or fallen, depending on the year you're comparing to

During the 2010 midterm elections, Republicans promised that if they got control of the House of Representatives, they would "roll back government spending to pre-stimulus, pre-bailout levels, saving at least $100 billion in the first year alone."

They say they made substantial progress: They note that on March 29, 2012, the House approved a budget that "would trim federal spending by more than $5 trillion over 10 years.” They also argue that they forced through the largest non-defense spending cut in American history and "forced Democrats to agree to spending cuts that exceeded the debt limit hike included in the Budget Control Act."

However, these budgets are just outlines for federal spending years into the future -- roadmaps that are not guaranteed to be followed. We think a more appropriate measurement is to look at how federal outlays have actually moved since the GOP took control of the House.

Before we look at the numbers, we should note that determining the correct fiscal year to serve as the comparison point is a contentious issue.

While presidential terms always lag the start of a fiscal year by nearly four months, 2009 was an especially tricky case. Usually the outgoing president draws up the broad spending outlines that shape the first half-year of a new president's term. But Obama had a significant impact on the fiscal year 2009 budget, since key measures to battle the economic crisis, such as the Troubled Asset Relief Program and the American Recovery and Reinvestment Act, were undertaken either in collaboration with him as president-elect or after he was sworn in on Jan. 20, 2009.

Reasonable people have disagreed about how to categorize fiscal years on the cusp of the Bush and Obama presidencies (see a lively debate here and here). For this analysis, we"ll look at both fiscal 2008 and 2009, using three common ways of looking at outlays.

If you look at spending without adjusting for inflation, the most recently figures from the Congressional Budget Office show that spending has gone up regardless of whether you use 2008 or 2009 as your reference point. If you use 2008, then federal spending has gone up by $560 billion. If you use 2009, it has risen by $20 billion.

If you factor in inflation, spending has risen by $350 billion since 2008, but fallen by $240 billion since 2009.

And if you calculate outlays as a percentage of gross domestic product, federal spending has gone up by 2.6 percentage points since fiscal year 2008, but fallen by 2.5 percentage points since 2009.

So, if you put it all together, it's possible for the Republicans to claim at least partial credit for cutting federal spending compared to fiscal year 2009, as long as you take inflation or GDP into account. But using fiscal year 2008 -- which is arguably the better year to fit the promise's "pre-stimulus, pre-bailout" definition -- spending is higher today, any way you look at it.

Because the results diverge depending on which year you use, we'll rate this promise a Compromise.

Sources:

Congressional Budget Office, "Monthly Budget Review, Fiscal Year 2011," Oct. 5, 2012

Congressional Budget Office, "Monthly Budget Review, Fiscal Year 2011," Nov. 7, 2011

Office of Management and Budget, "Table 1.3—Summary of Receipts, Outlays, and Surpluses or Deficits (-) in Current Dollars, Constant (FY 2005) Dollars, and as Percentages of GDP: 1940–2017, accessed Jan. 7, 2013

Office of John Boehner, "Keeping the Pledge to America: How Republicans Have Fought to Create Jobs, Cut Spending, & Change the Way Congress Does Business,” accessed Jan. 7, 2013

Bureau of Labor Statistics, inflation calculator, accessed Jan. 7, 2013

PolitiFact, "Viral Facebook post says Barack Obama has lowest spending record of any recent president," May 23, 2012

PolitiFact, "Lots of heat (and some light) on Obama's spending," May 25, 2012

Budget talks include many spending cuts

House Republicans promised during the 2010 campaign to roll back spending back to "pre-stimulus, pre-bailout levels" -- that's 2008 to you and me -- and they appear to be on their way. For weeks now, Republicans and the White House have been negotiating spending cuts as part of a broad package to address the nation's debt.

Driving the negotiations: A need to increase the legal limit on federal borrowing, often known as the debt ceiling. The U.S. Treasury Department has said it will need increased authority to borrow money as of Aug. 2, 2011. 

Republicans made some headway on the promise earlier this year when they crafted a deal for the 2011 fiscal year budget. (The fiscal year ends September 30.) In that deal, they cut $38 billion from the federal budget. 

We should note that the $38 billion cut is in spending authority, and some of that spending authority is from future budget years.

We should also note that some critics said the House Republicans should have cut $100 billion, not $38 billion, from the last budget to keep their promise. We considered that argument in some detail back in January and rejected it. 

Back then, we said that cutting $100 billion prior to September 30 would actually set the budget on a pace below the 2008 levels. In rating this promise on our Pledge-O-Meter, we will assess their overall success at returning to 2008 spending levels, on a pro-rated basis for the remaining months of this year, and in the 2012 budget and appropriations.

The negotiations for the 2012 budget are ongoing, and the current negotiations around the debt ceiling could include much larger spending cuts for years to come, potentially in the trillions of dollars over the next 10 years. It's not yet clear what a final deal will look like. 

But there has been enough action for us to see the Republicans are trying to cut spending. We move this promise to In the Works.

Sources:

Congressional Budget Office, Continuing resolutions for fiscal year 2011, accessed July 21, 2011

The Washington Post, Obama, GOP leaders said to discuss new debt plan, July 21, 2011

PolitiFact, Has the GOP already broken its promise on spending?, Jan. 11, 2011

The New York Times, Congress Passes Budget Bill, but Some in G.O.P. Balk, April 14, 2011

USA Today, Congress passes 2011 spending plan, April 15, 2011