As I noted briefly yesterday, Rex Cutting of Market Watch created quite a buzz with a chart-loaded column showing that federal spending has been increasing at the lowest levels since the 1950s since Barack Obama got (limited) control of the federal budget. He explicitly acknowledged that his numbers excluded FY 2009, since part of that fiscal year and most of the fiscal decisions were made before he took office:
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.
Conservative gabbers mostly ignored Cutting’s article, until AEI’s James Pethokoukis took a wack at it, arguing that the right measurement wasn’t the rate of spending growth but the absolute levels of spending as a percentage of GDP that have prevailed under Obama and previous presidents. Bush looks better than Obama according to Pethokoukis approach because he is evaluated according to the average spending levels during his administration, not where they wound up.
Interestingly enough, Pethokoukis concedes Obama inherited “over-spending” from Bush, but argues he was a crazy spendthrift for not reversing the trends, using a very deep and highly analytical analogy:
Obama chose not to reverse [Bush’s] elevated level of spending; thus he, along with congressional Democrats, are responsible for it. Only by establishing 2009 as the new baseline, something Republican budget hawks like Paul Ryan feared would happen, does Obama come off looking like a tightwad. Obama has turned a one-off surge in spending due to the Great Recession into his permanent New Normal through 2016 and beyond.
It’s as if one of my teenagers crashed our family minivan, and I had to buy a new one. And then, since I liked that new car smell so much, I decided to buy a new van every year for the rest of my life. I would indeed be a reckless spender.
Like I said: very deep and highly analytical. I guess Pethokoukis doesn’t spend much time listening to Mitt Romney, who thinks the economy is still in terrible, terrible shape, which would indicate that if “one-off” spending was appropriate in 2009, perhaps it still might be today. More importantly, I hardly think refusing to cut automatic stabilizer spending (the main areas of domestic spending increase since 2009), particularly for safety net programs where increased spending is a matter of higher enrollments by people in need rather than higher benefits, is analogous to buying a new car every year. If you must compare it to auto purchases, I’d say keeping the old car running is a closer match. Pethokoukos also doesn’t mention that a recession depresses GDP, making spending (which is affected both by population growth and by higher demand for public services) a higher percentage even if nothing else happens. But I guess he thinks anything other than austerity represents a “binge.”
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