Making an economic speech at the University of Wisconsin-La Crosse on July 2, 2015, Barack Obama ticked off a list of his accomplishments as president -- and made a bolder version of a claim we have heard before about slashing the federal budget deficit.
"So, we’ve got a record streak of private-sector job growth," Obama said in his remarks, which included veiled criticisms of Gov. Scott Walker on the day Walker filed federal papers as a precursor to announcing his run for president.
"We’ve cut the deficit by two-thirds. Our stock market has more than doubled, restoring 401(k)s for millions of families. This is progress. Step by step, America is moving forward. Middle-class economics works. It works. Yes!"
Here's why the deficit claim caught our attention:
In September 2014 in Milwaukee, Obama said he had cut the deficit in half. We rated that statement True, and it has become one of our most-clicked fact checks.
Could it be that, less than a year later, the deficit is down by two-thirds?
Deficit vs debt
Let’s be clear at the top that Obama is talking about the deficit, which has been getting smaller -- not the debt, which is getting bigger.
The deficit is an annual number. It’s the difference between what the government collects in revenues and spends in one year. The United States hasn’t seen budget surpluses since the days of President Bill Clinton.
The debt, meanwhile, is a running tally -- it’s the total of annual deficits minus any annual surpluses. The nation's debt currently exceeds $18 trillion, and it has risen by more than $7 trillion under Obama.
(Here’s a good primer from PolitiFact National on the difference between the two.)
Tracking the deficit numbers
In reviewing the cut-the-deficit-in-half claim, our baseline was fiscal 2009. That period started on Oct. 1, 2008, when George W. Bush was still president, and ended on Sept. 30, 2009, eight months after Obama took office.
We found the deficit was $1.41 trillion in 2009 and $679.5 billion in 2013 -- a drop of more than half.
Measured another way, the deficit made up 9.8 percent of the economy (gross domestic product) in 2009 and dropped to less than half of that -- 4.1 percent -- by the end of fiscal 2013.
But now we have figures for fiscal 2014.
PolitiFact National examined those figures in January 2015, after Obama said in his State of the Union speech that we've seen "our deficits cut by two-thirds." Our colleagues rated his statement Mostly True.
The 2014 deficit was $486 billion -- a drop of two-thirds from the $1.41 trillion in 2009. And it was 2.8 percent of GDP, a reduction of more than two-thirds from the 9.8 percent in 2009.
(In June 2015, the nonpartisan Congressional Budget Office projected that 2015 will end with a deficit that, as a percentage of GDP, will be the lowest since 2007.)
So, math wise, Obama’s two-thirds claim is solid. But there are a few caveats.
"Yes, we reduced the deficit two-thirds from its peak in 2009, but that was after deficits had just increased by nearly 800 percent to their highest level outside of World War II," Marc Goldwein of the Committee for a Responsible Federal Budget told us.
Indeed, Obama helped grow the 2009 deficit with his stimulus spending, although he can take some credit for the economy, which has improved since the Great Recession ended in June 2009 and helped bring down the deficits.
And although the Congressional Budget Office projects that deficits relative to GDP will decline slightly over the next few years, they will then rise and add more to the debt. Largely as a result of the aging population and rising health care costs, CBO projects the deficit to grow from less than 3 percent of GDP in 2015 to more than 6 percent in 2040.
Obama said: "We've cut the deficit by two-thirds."
In raw dollars and as a percentage of the overall economy, the annual federal deficit in 2014 was two-thirds smaller than in 2009, the year Obama took office. But there are several caveats, including the fact that his stimulus spending helped raise the 2009 deficit and the economy, for which he can take some credit, has improved since the end of the Great Recession the same year.
For a statement that is accurate but needs additional information, our rating is Mostly True.