On Thursday, I posted a short piece linking to a slightly longer piece by reporter Rex Nutting of MarketWatch which indicated, based on the way Nutting analyzed, that federal spending has risen at a slower rate under President Obama than under any president since the 1970s. In fact, it indicated that the two Democrats — Obama and Bill Clinton – presided over a slower rate of growth of federal spending than any of the three Republicans – Ronald Reagan or Bush I or Bush II.
I used the piece as an example of how partisan stereotypes can be misleading. According to the stereotypes, Republicans are more fiscally conservative than Democrats. Here’s an example of some numbers that suggest the opposite. I confess, other than noting that Nutting claimed to be relying on CBO data, I didn’t do much to check his methodology, and that may have been an example of what one might call selective skepticism or, in this case, selective lack of skepticism.
A good discussion thread attacked and defended the Nutting numbers and disputed the correct understanding of federal taxing, spending, deficit, debt and whom to blame for what. I recommend the thread to those who never click through to them. It’s mostly smart, reasonably civil and informative in a twisted way that leaves you more confused than you started.
But let’s stipulate that in many instances, more-confused-than-you-started is an important step on the road to wisdom and quasi-understanding.
Before I get any more existential than that, I’ll give you a shortcut. Politifact has reviewed the Nutting piece and ruled it “mostly true,” their second highest rating, although they followed up with a second essay on the issues raised without attaching a rating, but the tone of which suggests some regret about the earlier “mostly true.” And the Washington Post’s excellent “Fact Checker” Glenn Kessler gave Nutting a rating of three Pinocchios out of a possible four. Ezra Klein, editor of the Post’s “Wonkblog” put out one of the smartest pieces, because it basically acknowledged that the multiple vagaries surrounding the comparative spending data greatly reduce the reliability of any conclusion.
Having read all these and more pieces, let me catalogue only a few of the more-obvious problems:
Presidents aren’t czars. The spending that occurs during their term is the result of (among other complications) their interactions with Congress. Yes, it’s true, Obama wanted more stimulus than he was able to get once the Repubs took control of the House in 2010. You could argue that Obama shouldn’t get credit for a spending “restraint” that was imposed on him by Republicans over his objections.
Presidents inherit much from their predecessors. Among the things for which Obama was spending from 2009 until now was the war in Iraq, which he had opposed from the outset. Does it make ultimate sense to count the hundreds of billions spent to wind down that war on Obama’s spending tab? He also inherited the very expensive Medicare Part D drug benefit for seniors, which President Bush (II) pushed through Congress without providing a means of paying for it. Of course, you could go back to George Washington to find the origins of things that are still costing money in the Obama era. This point might ultimately morph into the unknowable question of whether a president, who inherits a bad economy, can reasonably (morally, politically, etc.) be held accountable for the state of the economy.
Spending rises automatically with the cost of living and the rising population but rises especially in a bad economy. A lot of federal programs – especially those that constitute the famed “safety net” — cost much more when people lose their jobs and need unemployment benefits or fall below the poverty line and need food stamps and many other variations on that theme. A president who inherits a prosperous economy will look like he is cutting spending just because people are getting jobs and rising out of poverty. And vice versa. Social Security and Medicare spending rises automatically, especially in a period when an unusually large generation (Baby Boomers anyone?) reaches the age of eligibility.
Much depends on the adjustments you choose. For example, the apparent relative profligacy of the presidents changes quite a bit if you adjust them for inflation or measure them as a percentage of the GDP. Nutting didn’t do either, which made the first Reagan term look like the most profligate of the last eight terms. But Reagan inherited a very high inflation rate from the Carter administration, and actually had good success in bringing that rate down (by forcing a recession, some would say). Nonetheless, it doesn’t make much sense to make Reagan look like a profligate spender in his first-term because of the inflation rate he inherited. On the other if you express total spending as a percentage of GDP (Kessler included those numbers in his fact-check piece), you make a president who inherited a growing economy look like a smaller spender and you make one who inherited a shrinking or stagnant economy (as Obama did) look worse.
Tax expenditures don’t count as expenditures, but they should. As Suzanne Mettler’s work on the “submerged state” demonstrates, a great deal of what the government does is invisible to the general public, and a big chunk of that is the rewards, incentives and loopholes of the tax code. Some of those who wanted to dispute Obama’s good score on the Nutting numbers brought up the very significant growth of the national debt over the past three years. Whatever else is happening, Obama must be spending to make the debt go up like that. But a big chunk of that debt increase represents not direct spending but foregone tax revenue attributable to the Bush tax cuts. If you look at the graphic on top of Klein’s piece, which purports to break down the “cost of Bush policies” and the “cost of Obama policies,” the biggest chunk by far is the “cost” of the Bush tax cuts. But those aren’t counted in any exercise, including Nutting’s, that focus only on direct expenditures by the federal government.
Assigning responsibility for spending during a presidential transition is a whole other mess. As Klein emphasizes, the federal fiscal year runs from Oct. 1- Sept. 30. So when the presidency changes hands, you get a fiscal year that is four months under the old president and eight months under the new. In the most recent instance, that transition included the peak of the financial meltdown and the huge, costly efforts to deal with it. But the budget for that fiscal year is created during the term of the outgoing president. Nutting assigned a portion of the spending in that year to Obama, but his (and Obama’s critics) say he didn’t assign enough. There are some reasonable facts to support either side of that argument, but at this point perhaps you agree with me that there is no right answer.
And that’s too bad, because it frees everyone – even the relative few who care about facts and try to look at both sides of an argument – to continue believing what makes them happy.