Obama got a fresh start

[asterism]

There has been a misunderstanding about government spending and deficits since President Obama was sworn in. Many people believe that Obama has not had enough time and that his first round of spending priorities is barely over.

That is simply not true. The Fiscal Year 2009 budget proposal by Bush was never appropriated. Starting October 1, 2008, spending continued at the then current levels:

The following sums are hereby appropriated, out of any money in the Treasury not otherwise appropriated, and out of applicable corporate or other revenues, receipts, and funds, for the several departments, agencies, corporations, and other organizational units of Government for fiscal year 2009, and for other purposes, namely:
SEC. 101. Such amounts as may be necessary, at a rate for operations as provided in the applicable appropriations Acts for
fiscal year 2008 and under the authority and conditions provided in such Acts

H.R. 2638

H.R. 2638 allocated spending until March 6, 2009. President Obama and Congress then enacted spending according to H.R. 1105.

Blaming Bush for 2009 spending increases is abjectly false.

 

[Greenbeard]

January 2009, just before Obama took office:

• CBO projects that the deficit this year will total $1.2 trillion, or 8.3 percent of GDP. Enactment of an economic stimulus package would add to that deficit. In CBO’s baseline, the deficit for 2010 falls to 4.9 percent of GDP, still high by historical standards.
• CBO expects federal revenues to decline by $166 billion, or 6.6 percent, from the amount in 2008. The combination of the recession and sharp drops in the value of assets—most significantly in publicly traded stock—is expected to lead to sizable declines in receipts, especially from individual and corporate income taxes.
• According to CBO’s estimates, outlays this year will include more than $180 billion to reflect the present-value of the net cost of transactions under the Troubled Asset Relief Program (TARP), which was created in the fall of 2008. (Broadly speaking, that cost is the purchase price minus the present value, adjusted for market risk, of any estimated future earnings from holding purchased assets and the proceeds from the eventual sale of them.) The TARP has the authority to enter into agreements to purchase assets totaling up to $700 billion outstanding at any one time, but the net cost over time will be much less than that amount.
• The deficit for 2009 also incorporates CBO’s estimate of the cost to the federal government of the recent takeover of Fannie Mae and Freddie Mac. Because those entities were created and chartered by the government, are responsible for implementing certain government policies, and are currently under the direct control of the federal government, CBO has concluded that their operations should be reflected in the federal budget. Recognizing that cost in 2009 adds about $240 billion (in discounted present-value terms) to the deficit this year.
• Economic factors have also boosted spending on programs such as those providing unemployment compensation and nutrition assistance as well as those with cost-of-living adjustments. (Such adjustments for 2009 are large because most of them are based on the growth in the consumer price index over the four quarters ending in the third quarter of 2008.)

Quite the fresh start. Not a single constraint!

 

[asterism]

January 2009, just before Obama took office:

• CBO projects that the deficit this year will total $1.2 trillion, or 8.3 percent of GDP. Enactment of an economic stimulus package would add to that deficit. In CBO’s baseline, the deficit for 2010 falls to 4.9 percent of GDP, still high by historical standards.
• CBO expects federal revenues to decline by $166 billion, or 6.6 percent, from the amount in 2008. The combination of the recession and sharp drops in the value of assets—most significantly in publicly traded stock—is expected to lead to sizable declines in receipts, especially from individual and corporate income taxes.
• According to CBO’s estimates, outlays this year will include more than $180 billion to reflect the present-value of the net cost of transactions under the Troubled Asset Relief Program (TARP), which was created in the fall of 2008. (Broadly speaking, that cost is the purchase price minus the present value, adjusted for market risk, of any estimated future earnings from holding purchased assets and the proceeds from the eventual sale of them.) The TARP has the authority to enter into agreements to purchase assets totaling up to $700 billion outstanding at any one time, but the net cost over time will be much less than that amount.
• The deficit for 2009 also incorporates CBO’s estimate of the cost to the federal government of the recent takeover of Fannie Mae and Freddie Mac. Because those entities were created and chartered by the government, are responsible for implementing certain government policies, and are currently under the direct control of the federal government, CBO has concluded that their operations should be reflected in the federal budget. Recognizing that cost in 2009 adds about $240 billion (in discounted present-value terms) to the deficit this year.
• Economic factors have also boosted spending on programs such as those providing unemployment compensation and nutrition assistance as well as those with cost-of-living adjustments. (Such adjustments for 2009 are large because most of them are based on the growth in the consumer price index over the four quarters ending in the third quarter of 2008.)

Quite the fresh start. Not a single constraint!

I take it you agree that all spending since March 2009 belongs to Obama and Congress.

 

[Care4all]

no, I don't think greenbeard is agreeing, he is pointing out that under the laws that were enacted before Obama's entry on to the scene, he was constrained and had to pay for the government mandates and associations ALREADY in place? Tarp, Fannie and Freddie, unemployment payments etc, were all things that had to be paid based on the existing, inherited circumstance and laws, not something that Obama's 2 months in office could affect or change.... At least that is what I get out of it....?

 

[asterism]

no, I don't think greenbeard is agreeing, he is pointing out that under the laws that were enacted before Obama's entry on to the scene, he was constrained and had to pay for the government mandates and associations ALREADY in place? Tarp, Fannie and Freddie, unemployment payments etc, were all things that had to be paid based on the existing, inherited circumstance and laws, not something that Obama's 2 months in office could affect or change.... At least that is what I get out of it....?

Quite a bit different than your talking point about 2009 being Bush's fault though correct? Bush can be mostly blamed for maintaining the first 5 months of FY 2009 spending at FY 2008 levels plus that monstrosity of a boondoggle called TARP.

Which of those spending mandates did then Senator Obama vote against? Which of those spending mandates (like TARP) did President-Elect Obama not support? I think the blame is being improperly placed here.

 

[Care4all]

President Bush gets 8 years of spending for his 8 year term, not 7 years, and Obama gets 8 years if reelected attributed to his terms not 9 years.

President Clinton got the year 2001 attributed to him, as his last budget, which did not end until September 30 2001, and this means that all of President Bush's actions during his first 8 months of 2001 like the tax cuts, the stimulus checks of $600, the bailouts to new york city and the airlines after 9/11 all got attributed to president Clinton's fiscal 2001 budget, even though President Bush's actions changed what Clinton proposed back in 2000....(president Clinton would have had a much LARGER surplus for fiscal Budget 2001, if President Bush would not have passed those new tax cuts or the emergency of 911 had not happened the september after he left office, but that's not how it works, and Clinton got the fiscal budget of 2001 attributed to him)

that's just the way it is from my understanding of it....each president gets 8 years of spending.

 

[asterism]

President Bush gets 8 years of spending for his 8 year term, not 7 years, and Obama gets 8 years if reelected attributed to his terms not 9 years.

President Clinton got the year 2001 attributed to him, as his last budget, which did not end until September 30 2001, and this means that all of President Bush's actions during his first 8 months of 2001 like the tax cuts, the stimulus checks of $600, the bailouts to new york city and the airlines after 9/11 all got attributed to president Clinton's fiscal 2001 budget, even though President Bush's actions changed what Clinton proposed back in 2000....(president Clinton would have had a much LARGER surplus for fiscal Budget 2001, if President Bush would not have passed those new tax cuts or the emergency of 911 had not happened the september after he left office, but that's not how it works, and Clinton got the fiscal budget of 2001 attributed to him)

Valid points with regard to the deficit and emergency spending. Since you think that Clinton would have had a much larger surplus for 2001, how much larger? Do you have any data? Also, this thread is about spending not deficits and taxation.

that's just the way it is from my understanding of it....each president gets 8 years of spending.

Except in this case Bush did not get 8 years of spending. He got 7 1/2 and the current President has a voting record on spending that we can examine. What spending increases being blamed on Bush did Obama not support? I remember the approval from Obama supporters who were (correctly) projecting he'd win in 2009 and he'd get to "hit the ground running" since spending for half of 2009 was going to be dictated by him and the Democratic majority.

Why the revision in history? The facts are right there.

 

[Care4all]

President Bush gets 8 years of spending for his 8 year term, not 7 years, and Obama gets 8 years if reelected attributed to his terms not 9 years.

President Clinton got the year 2001 attributed to him, as his last budget, which did not end until September 30 2001, and this means that all of President Bush's actions during his first 8 months of 2001 like the tax cuts, the stimulus checks of $600, the bailouts to new york city and the airlines after 9/11 all got attributed to president Clinton's fiscal 2001 budget, even though President Bush's actions changed what Clinton proposed back in 2000....(president Clinton would have had a much LARGER surplus for fiscal Budget 2001, if President Bush would not have passed those new tax cuts or the emergency of 911 had not happened the september after he left office, but that's not how it works, and Clinton got the fiscal budget of 2001 attributed to him)

Valid points with regard to the deficit and emergency spending. Since you think that Clinton would have had a much larger surplus for 2001, how much larger? Do you have any data? Also, this thread is about spending not deficits and taxation.

that's just the way it is from my understanding of it....each president gets 8 years of spending.

Except in this case Bush did not get 8 years of spending. He got 7 1/2 and the current President has a voting record on spending that we can examine. What spending increases being blamed on Bush did Obama not support? I remember the approval from Obama supporters who were (correctly) projecting he'd win in 2009 and he'd get to "hit the ground running" since spending for half of 2009 was going to be dictated by him and the Democratic majority.

Why the revision in history? The facts are right there.

btw, thanks for being nice, with your answers and questions!

I am not certain, on what the Clinton budget surplus for fiscal 2001 would have been in precise measures, without spending the time to nit pic it all, once all the information is gathered....I could use what it was projected to be and find that figure....if memory serves it was $250-$350 billion....but I will see what I can find out on that when I get some time.

President bush did get 8 years of fiscal budgets attributed to him, all reports will show such, and 2009 is attributed to him no matter what happened once the new president took office.

think about this....what can the new president really do that will change the trend? What did congress pass to keep the government afloat....? Or even clearer...what was in this continuance of budget bill that President Bush would not have had to sign off on, that you want to put on to Obama? The wars? TARP? Unemployment payments? President bush believed in stimulus....he had a few during his term and one as late as his last year in office....do you think he would not have had a another stimulus with the economy already in the toilet?

there is not much a president can do to change things from the way they are trending in such a DOWN economy, once they get in to office or the first few months in office will not change a downward trend such as the one we had, no matter how much they wished they could. President Obama may have signed off on the legislation that paid the bills for the rest of the year, but could not have had time to change the trend in just 2 months in office when the bill was signed.

I did not vote for President Obama, I have no allegiance towards him, other than my support of him because he IS OUR PRESIDENT.

It would take going through this march bill to continue our existing gvt with a fine tooth comb to figure out what Bush would not have paid for with his budget or supported imo, before we can blankly throw all of it on to President Obama from April onward.

Care

 

[RetiredGySgt]

President Bush gets 8 years of spending for his 8 year term, not 7 years, and Obama gets 8 years if reelected attributed to his terms not 9 years.

President Clinton got the year 2001 attributed to him, as his last budget, which did not end until September 30 2001, and this means that all of President Bush's actions during his first 8 months of 2001 like the tax cuts, the stimulus checks of $600, the bailouts to new york city and the airlines after 9/11 all got attributed to president Clinton's fiscal 2001 budget, even though President Bush's actions changed what Clinton proposed back in 2000....(president Clinton would have had a much LARGER surplus for fiscal Budget 2001, if President Bush would not have passed those new tax cuts or the emergency of 911 had not happened the september after he left office, but that's not how it works, and Clinton got the fiscal budget of 2001 attributed to him)

Valid points with regard to the deficit and emergency spending. Since you think that Clinton would have had a much larger surplus for 2001, how much larger? Do you have any data? Also, this thread is about spending not deficits and taxation.

that's just the way it is from my understanding of it....each president gets 8 years of spending.

Except in this case Bush did not get 8 years of spending. He got 7 1/2 and the current President has a voting record on spending that we can examine. What spending increases being blamed on Bush did Obama not support? I remember the approval from Obama supporters who were (correctly) projecting he'd win in 2009 and he'd get to "hit the ground running" since spending for half of 2009 was going to be dictated by him and the Democratic majority.

Why the revision in history? The facts are right there.

btw, thanks for being nice, with your answers and questions!

I am not certain, on what the Clinton budget surplus for fiscal 2001 would have been in precise measures, without spending the time to nit pic it all, once all the information is gathered....I could use what it was projected to be and find that figure....if memory serves it was $250-$350 billion....but I will see what I can find out on that when I get some time.

President bush did get 8 years of fiscal budgets attributed to him, all reports will show such, and 2009 is attributed to him no matter what happened once the new president took office.

think about this....what can the new president really do that will change the trend? What did congress pass to keep the government afloat....? Or even clearer...what was in this continuance of budget bill that President Bush would not have had to sign off on, that you want to put on to Obama? The wars? TARP? Unemployment payments? President bush believed in stimulus....he had a few during his term and one as late as his last year in office....do you think he would not have had a another stimulus with the economy already in the toilet?

there is not much a president can do to change things from the way they are trending in such a DOWN economy, once they get in to office or the first few months in office will not change a downward trend such as the one we had, no matter how much they wished they could. President Obama may have signed off on the legislation that paid the bills for the rest of the year, but could not have had time to change the trend in just 2 months in office when the bill was signed.

I did not vote for President Obama, I have no allegiance towards him, other than my support of him because he IS OUR PRESIDENT.

It would take going through this march bill to continue our existing gvt with a fine tooth comb to figure out what Bush would not have paid for with his budget or supported imo, before we can blankly throw all of it on to President Obama from April onward.

Care

What did the New Congress ( which was Democratic just like the old one) and the New President get to change? They got to add over a trillion dollars to the NONE Budget that Bush never signed. All Bush signed was an agreement to freeze levels at 2008 levels until the NEW President and Congress created the Budget and passed it the next year.

By the way? the 2007, 2008 budgets belong to the Democrats as well, they wrote the bills and created the budgets those years, NOT the Republicans. All Bush did is sign them.

 

[Care4all]

Valid points with regard to the deficit and emergency spending. Since you think that Clinton would have had a much larger surplus for 2001, how much larger? Do you have any data? Also, this thread is about spending not deficits and taxation.



Except in this case Bush did not get 8 years of spending. He got 7 1/2 and the current President has a voting record on spending that we can examine. What spending increases being blamed on Bush did Obama not support? I remember the approval from Obama supporters who were (correctly) projecting he'd win in 2009 and he'd get to "hit the ground running" since spending for half of 2009 was going to be dictated by him and the Democratic majority.

Why the revision in history? The facts are right there.

btw, thanks for being nice, with your answers and questions!

I am not certain, on what the Clinton budget surplus for fiscal 2001 would have been in precise measures, without spending the time to nit pic it all, once all the information is gathered....I could use what it was projected to be and find that figure....if memory serves it was $250-$350 billion....but I will see what I can find out on that when I get some time.

President bush did get 8 years of fiscal budgets attributed to him, all reports will show such, and 2009 is attributed to him no matter what happened once the new president took office.

think about this....what can the new president really do that will change the trend? What did congress pass to keep the government afloat....? Or even clearer...what was in this continuance of budget bill that President Bush would not have had to sign off on, that you want to put on to Obama? The wars? TARP? Unemployment payments? President bush believed in stimulus....he had a few during his term and one as late as his last year in office....do you think he would not have had a another stimulus with the economy already in the toilet?

there is not much a president can do to change things from the way they are trending in such a DOWN economy, once they get in to office or the first few months in office will not change a downward trend such as the one we had, no matter how much they wished they could. President Obama may have signed off on the legislation that paid the bills for the rest of the year, but could not have had time to change the trend in just 2 months in office when the bill was signed.

I did not vote for President Obama, I have no allegiance towards him, other than my support of him because he IS OUR PRESIDENT.

It would take going through this march bill to continue our existing gvt with a fine tooth comb to figure out what Bush would not have paid for with his budget or supported imo, before we can blankly throw all of it on to President Obama from April onward.

Care

What did the New Congress ( which was Democratic just like the old one) and the New President get to change? They got to add over a trillion dollars to the NONE Budget that Bush never signed. All Bush signed was an agreement to freeze levels at 2008 levels until the NEW President and Congress created the Budget and passed it the next year.

By the way? the 2007, 2008 budgets belong to the Democrats as well, they wrote the bills and created the budgets those years, NOT the Republicans. All Bush did is sign them.

rgs, that's just bull crud.... the gvt was running on 2008 budgets....read the january budget estimate made in january that greenbeard posted....it was $1.2 trillion in deficit spending BEFORE obama was sworn in....then add TARP, the Wars which were off budget, the increased Unemployment payments and taking in 160 or maybe it was 190 billion less taken in, in taxes because of the increase of the unemployed not paying taxes and you come pretty darn close to the nearly $1.5 trillion deficit....

you can't just make up these new rules and not attribute a president's last fiscal year to the new president who just walked in the door.

EVERY SINGLE PRESIDENT in our history, whether a budget was signed or not, gets his last year's fiscal budget attributed to him.....even if the new president had to react to the trend inherited....

that's just a fact.

and as my example above with Clinton and Bush, the 2001 budget gets attributed to Clinton, even with the changes President Bush and congress, made.

 

[Greenbeard]

I take it you agree that all spending since March 2009 belongs to Obama and Congress.

Of course I'm responding to the thread title: "Obama got a fresh start." In reality, when he walked in the door he was facing recession-induced declining federal revenues, increased mandatory spending on automatic stabilizers, massive TARP outlays, and Fannie and Freddie had been placed in conservatorship. We were facing a $1.2 trillion deficit for the fiscal year, all before he took office. I don't know on what planet walking into those circumstances would be considered a "fresh start." That doesn't mean Obama and the 111th Congress didn't spend any money--notably, the stimulus (ARRA) was their brainchild--it means exactly what you'd think it means: there was considerable path dependence when it came to spending in FY 2009.

As CBO told us last November:

Outlays rose by 18 percent in 2009, the fastest rate of growth since 1975. Three initiatives—the Troubled Asset Relief Program (TARP), net cash infusions for Fannie Mae and Freddie Mac, and ARRA—drove that growth, adding $353 billion to outlays in 2009, or 2.5 percent of GDP. All other federal spending accounted for 22.2 percent of GDP in 2009, up from 20.6 percent in 2008.

Stimulus spending from ARRA totaled $108 billion in 2009—$32 billion for Medicaid, $22 billion for unemployment benefits, and $54 billion for other programs and activities.​

Most of the increase in spending in FY 2009 came from those three programs, only one of which is distinctly Obama's (ARRA), and all of which are directly related to the recession and financial crisis. At the same time, tax revenues fell--because that's what tax revenues do during recessions and because one-third of the "spending" in the stimulus package was actually tax relief.

And that's where giant deficits come from.