The federal government today reported a $17.5 billion budget deficit for January. That brings this fiscal year's shortfall through four months to $194.2 billion, up from $182.8 billion during the same period last year.
As usual, the Associated Press's coverage, this time delivered by Martin Crutsinger, named the nation's "Worst Economic Writer" by National Review's Kevin Williamson two years ago, gave an incomplete historical explanation for the $1 trillion-plus annual deficits incurred from fiscal 2009 through 2012, and "somehow" forgot that President Barack Obama, who is demanding higher taxes in the budget he recently submitted, already got a significant tax increase on higher incomes just two years ago. Excerpts follow the job:
US BUDGET DEFICIT RUNNING 6.2 PERCENT HIGHER THAN LAST YEAR
... The budget deficit has gradually narrowed since 2012, which was the fourth straight year in which it topped the $1 trillion mark. The improvement reflects the country's economic recovery from recession. The government is seeing higher tax revenues as people go back to work and smaller payments for safety-net programs such as unemployment assistance. It also represents efforts by Congress to control deficits through higher taxes and across-the-board spending cuts.
... For the current budget year, government revenues total $1.05 trillion, an increase of 8.7 percent from the same period a year ago. Government spending totals $1.24 trillion, up 8.3 percent over last year.
The deficit in 2014 narrowed to $483.3 billion from $680.2 billion in 2013. Before that, the deficits soared to record heights as the government grappled with revenue losses from the Great Recession and increased spending in such areas as unemployment benefits and food stamps.
... The president's budget proposal will set off months of wrangling in Congress. Obama proposed increasing taxes on the wealthy and using the extra income to support increased funding to rebuild America's aging roads and bridges, provide two years of free community college to qualified students and trim future deficits to what the administration said would be manageable levels.
But Republicans immediately attacked the proposal for raising taxes and failing to tackle rising spending on government benefit programs such as Social Security and Medicare.
The reduced cost of unemployment benefits has indeed been a factor in bringing down the deficit, but food stamp spending grew by leaps and bounds from fiscal 2008 through 2011, doubling from $37.6 billion to $75.7 billion, and has gone down just 7% during the past year — even as the economy added millions of jobs.
What Crutsinger conveniently failed to mention is that the Obama administration's 2009 stimulus program, advertised as a temporary, two-year effort, instead was used as a way to permanently increase annual federal spending levels.
Unfortunately, it appears that the 2013 tax increases Crutsinger "forgot" to mention have been completely used up — and then some — by additional federal spending. An 8 percent increase in spending after the ramp-ups seen in most of the previous six years is so ridiculous that Matt Drudge is currently flagging it. During the first four months of fiscal 2008, the government spent $949 billion. So far this year, it has spent $1.24 trillion — an indefensible 31 percent increase.
So President Obama wants to go to the well again. It would be nice if at least once the AP would tell readers about the "again" part.
Cross-posted at BizzyBlog.com.
