By Dick Morris
02.1.2010
President Obama was disingenuous today when he said that the budget deficit he faced “when I walked in the door” of the White House was $1.3 trillion. He went on to say that he only increased it to $1.4 trillion in 2009 and was raising it to $1.6 trillion in 2010.
As Joe Wilson said “you lie.”
Here are the facts:
In 2008, Bush ran a deficit of $485 billion. By the time the fiscal year started on October 1, 2008, it had gone up by another $100 billion due to increased recession-related spending and depressed revenues. So it was $600 billion. That was the real Bush deficit.
But when the fiscal crisis hit, Bush had to pass TARP in the final months of his presidency which cost $700 billion. Under the federal budget rules, a loan and a grant are treated the same. So the $700 billion pushed the deficit — officially — up to $1.3 trillion. But not really. The $700 billion was a short term loan. $500 billion of it has already been repaid.
So what was the real deficit Obama inherited? The $600 billion deficit Bush was running plus the $200 billion of TARP money that probably won’t be repaid (mainly AIG and Fannie Mae and Freddie Mac). That totals $800 billion. That was the real deficit Obama inherited.
Then…he added $300 billion in his stimulus package, bringing the deficit to $1.1 trillion. And falling revenues and other increased welfare spending pushed it up to $1.4 trillion.
So, effectively, Obama came close to doubling the deficit.
His program of fiscal austerity in this new budget is a joke. If he wanted to lower the deficit, here’s what he could do:
1. Cancel the remaining $500 billion of stimulus spending and
2. Cancel the $300 billion of spending in stimulus II.
Presto! The deficit is cut in half.
Those are the real numbers.
