Fact Checker Nails Obama’s Deficit Deceit

THE-TRUTH-IS-OUT-THERE (Obama Files) & it ain’t hard to find! 🙂

Fact Checker Nails Obama’s Deficit Deceit

“Over the last four years, the deficit has gone up, but 90 percent of that is as a consequence of two wars that weren’t paid for, as a consequence of tax cuts that weren’t paid for, a prescription drug plan that was not paid for, and then the worst economic crisis since the Great Depression. Now we took some emergency actions, but that accounts for about 10 percent of this increase in the deficit, and we have actually seen the federal government grow at a slower pace than at any time since Dwight Eisenhower, in fact, substantially lower than the federal government grew under either Ronald Reagan or George Bush.”“Taxes are lower on families than they’ve been probably in the last 50 years. So I haven’t raised taxes.”–President Obama, interview on CBS’ “60 Minutes,” recorded on Sept. 12, 2012, and aired on Sept. 23There are a lot of numbers and assertions in these statements by the president. We will primarily focus on the first statement, since it raises interesting questions of presidential responsibility.But we do want to note the tax statement, since we seem to have a rare moment when Obama and GOP rival Mitt Romney appear to agree. Here’s what Romney said on Tuesday: “I admit this, he has one thing he did not do in his first four years, he’s said he’s going to do in his next four years, which is to raise taxes.”Generally, Republicans have argued (and the Supreme Court agreed) that Obama’s health insurance mandate is a tax. The health care law also included a number of taxes aimed mostly at the wealthy. But broadly speaking, Obama has reduced taxes for most Americans, so much so that the Congressional Budget Office says that effective tax rates are at their lowest point in three decades.In any case, let’s examine more closely Obama’s two key assertions during 60 Minutes — that only 10 percent of the current deficit comes from his policies and that the federal government has grown under his watch at a “a slower pace than at any time since Dwight Eisenhower.” Are those claims correct?The FactsIn support of the first statement, the Obama campaign pointed us to a chart made by the Treasury Department. This chart looks backward, to the reasons why the projected $5.6 trillion surplus from 2001 disappeared. It is based on these CBO data, which the Fact Checker column first brought to public view in early 2011. So we are quite familiar with it. This is how we broke down the numbers then in explaining the reasons for the disappearance of the surplus and the rise of monster deficits:Increased spending (discretionary and mandatory): $4.3 trillion (36.5 percent)Incorrect CBO estimates (economic/technical reasons): $3.3 trillion (28 percent)Tax cuts: $2.8 trillion (24 percent)Higher interest costs: $1.4 trillion (12 percent)Obama, in his remarks, doesn’t really say he is talking about the disappearance of the surplus. In fact, he prefaces his statement with a misleading phrase — “over the last four years” — which suggests he is only talking about the period in which he was president.Because of compounding, however, the Treasury Department chart overemphasizes the impact of the events that happened early in the process (such as the Bush tax cuts) and minimizes more recent events (such as Obama’s policies.)