The Truth-O-Meter Says:
Rove

The Obama administration "raised discretionary spending by 24 percent from President George W. Bush's last full-year budget and will run up more debt by October than Bush did in eight years."

Karl Rove on Sunday, January 10th, 2010 in the Washington Post

Rove claims Obama has already run up more debt than Bush did in eight years

You gotta love a good war of words between past and present presidential advisers.

The first volley in this latest "he-said, he-said" dust-up came from Karl Rove, former adviser to President George W. Bush, who was one of the political experts asked by the Washington Post for their opinions about how the Democratic Party should handle the midterm elections. Rove's two cents was more criticism than advice.

The Obama administration "raised discretionary spending by 24 percent from President George W. Bush's last full-year budget and will run up more debt by October than Bush did in eight years."

President Barack Obama's top strategist, David Axelrod, fired back with a op-ed piece in the Washington Post in which he called Rove's comments shameless in light of the fact that, "the day the Bush administration took over from President Bill Clinton in 2001, America enjoyed a $236 billion budget surplus -- with a projected 10-year surplus of $5.6 trillion. When the Bush administration left office, it handed President Obama a $1.3 trillion deficit -- and projected shortfalls of $8 trillion for the next decade." We broke that claim down here.

In this item, we'll focus on Rove's claim.

The first part of his claim is that Obama raised discretionary spending -- federal money that Congress can adjust every year -- by 24 percent from Bush's last full-year budget.

According to the White House Office of Management and Budget's historical tables, discretionary spending will go from roughly $1.13 trillion in the 2008 fiscal year (Bush's last full year budget) to $1.41 trillion in 2010. That's a roughly 24 percent increase, so Rove has the number right.

End of story? Not quite.

Brian Riedl, lead budget analyst for the conservative Heritage Foundation, said that number can be misleading because emergency and war spending can inflate the number. He prefers to judge discretionary spending based on the budget resolutions that pass each year. By that measure, he said, discretionary spending would increase by 14 percent during the period Rove is using.

Now let's take a look at the second part of Rove's equation, the claim that Obama will run up more debt by October than Bush did in eight years. First, a quick reminder about deficits and debt: deficits refer to how much money the government spends against revenues in a year; the national debt is the cumulative amount the government owes over time.

Rove talked about the national debt. During Bush's term, from the end of 2001 until the end of 2008, the debt held by the public rose $2.5 trillion (to $5.8 trillion). According to estimates from the Congressional Budget Office in August last year, the public debt rose to $7.6 trillion in 2009 and is expected to rise to nearly $8.8 trillion by the end of the 2010 fiscal year.

So debt rose by $2.5 trillion during the Bush years from 2001 through 2008; and it is expected to rise $3 trillion in the two years under Obama. But Rove's equation assumes Obama is responsible for all of the debt accumulated in 2009 and 2010. And that's where things get messy.

Obama took office in January 2009. But the federal budget works on a fiscal year from Oct. 1 to Sept. 30 of each year. So a third of the 2009 fiscal year had passed before Obama even took office.

So the spending for 2009 was largely determined by a Congress controlled by Democrats and a Republican president. The omnibus spending bill was held over and signed by Obama, who added $20 billion in discretionary spending. But that's hardly a blip in the scheme of things.

The Congressional Budget Office estimated that the Obama administration inherited a deficit of more than $1.2 trillion the day it walked in the door.

So the debate then becomes how much of 2009 spending ought to be credited to Bush and how much to Obama.

For example, who takes the $133 billion hit for the Troubled Asset Relief Program (TARP) spent in 2009? It was signed by Bush, but Reidl thinks Obama ought to shoulder some of that. Much of TARP's losses are due to auto company bailouts and the home loan program initiated by Obama. And who gets credit for funding the wars in Iraq and Afghanistan, or the $400 billion in reduced tax revenue because individual income and corporate profits have dropped due to the economic downturn?

Yes, the Obama administration tacked on an additional $115 billion in stimulus spending in 2009. And much more will be spent on the stimulus in 2010.

"It's true they've provided more money under this administration, but it's hard to say it's a Democratic policy," said Jim Horney, director of federal fiscal policy at the Center on Budget and Policy Priorities, a liberal economic think tank. "Increasing the debt is overwhelmingly the result of the recession and responding to it. To Bush's credit, they actually did what needed to be done. Debt went up a lot, but most of the reason for that is the recession and dealing with it."

Axelrod argues that Obama also inherited Bush tax cuts and Medicare prescription drug expenses, which add about $200 billion a year to annual deficits (Axelrod called them "unwelcome gifts that keep on giving"). Riedl argues that kind of complaint may be valid in a president's first year, but by a president's second year, he needs to take ownership of programs he has inherited. If, for example, Obama thinks the prescription drug benefits in Medicare are unaffordable, he should try to repeal them, Riedl said. If he thinks the Bush tax cuts were wrong, try to roll them back.

Any way you slice the numbers, spending is on the rise. Our biggest problem with Rove's statement is that he credits all of the debt accumulated in 2009 and 2010 to Obama, and even conservative budget analysts agree that it's fair to assign at least some of the 2009 increase to Bush. And so we rate Rove's comment Half True.

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About this statement:

Published: Friday, January 15th, 2010 at 6:21 p.m.

Subjects: Federal Budget, Stimulus

Sources:

Washinton Post, "Democratic strategies for 2010, Submission by Karl Rove," Jan. 10, 2010

Washinton Post, "Op Ed: What Karl Rove got wrong on the U.S. deficit," by David Axelrod, Jan. 15, 2010

Office of Management and Budget Web site, Historical Tables: Table 1.1 Summary of Receipts, Outlays and Surpluses or Deficits, 1789-2014

Office of Management and Budget Web site, Historical Tables: Table 8.1—Outlays by Budget Enforcement Act Category: 1962–2014 

Office of Management and Budget Web site, Historical Tables: Table 7.1—Federal Debt at the End of Year: 1940–2014

PolitiFact, "Freedom Project claims the deficit is the biggest in history — and that Democrats are to blame," by Catharine Richert, Oct. 22, 2009

Congressional Budget Office, Budget and Economic Outlook: Summary Table 1. CBO's Baseline Budget Outlook, August 2009

Interview with Brian Riedl, lead budget analyst for the Heritage Foundation, Jan. 15, 2010

E-mail interview with Jim Horney, director of federal fiscal policy the Center on Budget and Policy Priorities, Jan. 15, 2010

 

Written by: Robert Farley
Researched by: Robert Farley
Edited by: Bill Adair

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