A bogus report published by MarketWatch Tuesday claiming "under Obama, federal spending is rising at the slowest pace since Dwight Eisenhower brought the Korean War to an end in the 1950s" has been all the rage at the White House and MSNBC.
Conservative columnist Ann Coulter correctly observed Wednesday:
Note that Schultz also said that the "part of the chart representing President Obama's term includes a stimulus package, too." As we shall see, that is a big, fat lie.
Schultz's guest, Reuters columnist David Cay Johnston confirmed: "And clearly, Obama has been incredibly tight-fisted as a president."
MSNBC's Rachel Maddow also reported Nutting's absurd findings Tuesday.
As NewsBusters reported Wednesday, Chris Matthews used this report to "prove" Obama isn't a reckless spender.
Maybe even worse, White House press secretary Jay Carney quoted from the piece during Wednesday's press gaggle aboard Air Force One:
JAY CARNEY, WHITE HOUSE PRESS SECRETARY: Can I, since you guys are a little woolly-headed this morning, I just wanted to read something that I read this morning that caught my attention. This is from Market Watch's Rex Nutting. He says, "Of all the falsehoods told about President Obama, the biggest whopper is the one about his reckless spending spree. Almost everyone believes that Obama has presided over a massive increase in federal spending, but it didn't happen. Although there was a big stimulus bill under President Obama, federal spending is rising at its slowest pace since Dwight Eisenhower brought the Korean War to an end in the 1950s. Even hapless Herbert Hoover managed to increase spending more than Obama has."
Q You're emulating Herbert Hoover now as a standard --
MR. CARNEY: Not at all. I think it is simply a fact that despite the enormous challenges that this country faced when the President took office and the absolute essential need for taking dramatic action and significant action in passing a stimulus bill, as well as the other actions the President took, this President has been -- has demonstrated significant fiscal restraint and acted with great fiscal responsibility.
Here's what Nutting wrote Tuesday:
Of all the falsehoods told about President Barack Obama, the biggest whopper is the one about his reckless spending spree.
As would-be president Mitt Romney tells it: “I will lead us out of this debt and spending inferno.”
Almost everyone believes that Obama has presided over a massive increase in federal spending, an “inferno” of spending that threatens our jobs, our businesses and our children’s future. Even Democrats seem to think it’s true.
Government spending under Obama, including his signature stimulus bill, is rising at a 1.4% annualized pace — slower than at any time in nearly 60 years.
But it didn’t happen. Although there was a big stimulus bill under Obama, federal spending is rising at the slowest pace since Dwight Eisenhower brought the Korean War to an end in the 1950s.
Nutting created the following rather misleading chart for readers:
But what the folks at MSNBC and Carney ignored was the following in Nutting's nutty piece:
• In the 2009 fiscal year — the last of George W. Bush’s presidency — federal spending rose by 17.9% from $2.98 trillion to $3.52 trillion. Check the official numbers at the Office of Management and Budget.
• In fiscal 2010 — the first budget under Obama — spending fell 1.8% to $3.46 trillion.
• In fiscal 2011, spending rose 4.3% to $3.60 trillion.
Nutting then played a little sleight of hand with readers by switching from OMB's numbers to the Congressional Budget Office's:
• In fiscal 2012, spending is set to rise 0.7% to $3.63 trillion, according to the Congressional Budget Office’s estimate of the budget that was agreed to last August.
• Finally in fiscal 2013 — the final budget of Obama’s term — spending is scheduled to fall 1.3% to $3.58 trillion. Read the CBO’s latest budget outlook.
Why make the switch to CBO? Is it because its projections are more conservative than Obama's OMB which forecasts spending of $3.8 trillion for FY 2012 and FY 2013?
That would change Nutting's report significantly wouldn't it?
But more importantly, much of his premise is entirely flawed.
It is normally acceptable for presidents to assume responsibility for the federal budget on October 1 the year they're sworn in.
As we operate on a fiscal year versus a calendar year, the budget of the first roughly eight months under a new president was established by the old one.
In Obama's case, that budget initially estimated spending for FY 2009 at $3.1 trillion.
Unfortunately, things didn't work out that way as with the coming of the financial collapse, spending for FY 2009 was far greater than originally planned.
Nutting for some reason decided to place all this on Bush:
What people forget (or never knew) is that the first year of every presidential term starts with a budget approved by the previous administration and Congress. The president only begins to shape the budget in his second year. It takes time to develop a budget and steer it through Congress — especially in these days of congressional gridlock.
The 2009 fiscal year, which Republicans count as part of Obama’s legacy, began four months before Obama moved into the White House. The major spending decisions in the 2009 fiscal year were made by George W. Bush and the previous Congress.
Like a relief pitcher who comes into the game with the bases loaded, Obama came in with a budget in place that called for spending to increase by hundreds of billions of dollars in response to the worst economic and financial calamity in generations.
In most instances Nutting would be correct. However, he forgets that Obama was a Senator before becoming President.
The junior senator from Illinois voted for the FY 2009 budget and voted for the Emergency Economic Stabilization Act of 2008 in October of that year which included the Troubled Asset Relief Fund (TARP).
This has always been a point of contention for conservatives: how do you inherit what you voted for? Obama could only claim to inherit the FY 2009 budget if he voted against it and voted against all the additional spending associated with it.
As he didn't oppose all this spending when he was a Senator, he can't absolve himself of responsibility for it and neither should Nutting, Carney, or the shills at MSNBC in his behalf.
Furthermore, as Coulter noted, there was additional spending in 2009 that was specifically authorized by Obama that Nutting totally ignored:
Obama didn't come in and live with the budget Bush had approved. He immediately signed off on enormous spending programs that had been specifically rejected by Bush. This included a $410 billion spending bill that Bush had refused to sign before he left office. Obama signed it on March 10, 2009. Bush had been chopping brush in Texas for two months at that point. Marketwatch's Nutting says that's Bush's spending.
Obama also spent the second half of the Troubled Asset Relief Fund (TARP). These were discretionary funds meant to prevent a market meltdown after Lehman Brothers collapsed. By the end of 2008, it was clear the panic had passed, and Bush announced that he wouldn't need to spend the second half of the TARP money.
But on Jan. 12, 2009, Obama asked Bush to release the remaining TARP funds for Obama to spend as soon as he took office. By Oct. 1, Obama had spent another $200 billion in TARP money. That, too, gets credited to Bush, according to the creative accounting of Rex Nutting.
As for the CBO sleight of hand, Hot Air exposed additional chicanery Wednesday:
Nutting cites the Congressional Budget Office (CBO) to claim FY 2013 spending is supposed to go down by 1.3%. This is extremely misleading. In citing the CBO, Nutting is looking at the its 2012 baseline report on spending. This report looks at how current law will impact spending and the deficit. However, in the same report, CBO’s alternative fiscal scenario (what I like to call the politically realistic scenario, with explanations of the likely course Congress will take regarding specific tax and spending programs) expects certain spending reductions to be delayed by Congress. These include cuts to doctor payments in Medicare and the sequestration cuts scheduled to take place in 2013. These and other examinations of fiscal reality cause the CBO to note “deficits would average 5.4 percent of GDP over the 2013–2022 period, rather than the 1.5 percent reflected in CBO’s baseline projections.” The CBO also expects the difference in deficits between the baseline report and alternative fiscal scenario to be about two percent of GDP, or over $300 billion in 2013.
Nutting also ignored costs associated with the auto bailout and any FY 2009 stimulus spending.
Add it all up, and it's preposterous to claim the $3.52 trillion in spending in FY 2009 was all Bush's fault and that Obama's budget clock should start ticking on October 1, 2009.
Also of note is that programs such as TARP and the stimulus package were sold to the American people as emergency spending that wouldn't be recurring.
As the last budget agreed upon by the executive and legislative branches prior to the financial crisis projected spending of $3.1 trillion, that's the baseline from which new budgets should operate adjusted for inflation.
Unfortunately as we conservatives correctly predicted at the time, this wouldn't end up being the case, and the new baseline would be what was finally spent in 2009.
As such, while the President and his shills in the media celebrate what they claim to be "flat spending" in Obama's first term, the FY 2013 budget projects outlays $700 billion greater than the last budget before the financial crisis, a 23 percent increase.
If that's what these folks call "flat," we're all in a lot of trouble.
But this is clearly the goal: to revise history before the election to manipulate the public into thinking that spending hasn't gone up under Obama.
Like everything else, it's all Bush's fault!
In Nutting the White House has a perfect shill. NewsBuster Tom Blumer has regularly written about Nutting's propensity to misreport economic data.
Now he's doing such a "good job" they're referring to his shoddy reporting in press briefings.
MarketWatch should be so proud.
*****Update: Readers are advised that the original article included a doctored picture of Obama and others that turned out to have anti-Semitic imagery that I didn't notice when I incorporated it into the piece. Those familiar with my work know that's not something I would intentionally do. I apologize to anyone with better eyes than I have that noticed the imagery and was in any way offended.
