Obama's budget problem, and ours
The graph above -- click on it for a larger version -- tracks federal spending, revenues and deficits/surpluses all the way back to 1980. What you'll see is that the budgets for 2008, 2009, 2010, 2011 and 2012 look pretty different than the rest of the graph. Revenues drops, spending rises, and deficits, as you'd expect, skyrocket. But the expected deficit moving into 2013 and beyond looks pretty much like the deficits across the rest of the graph. So too do the predictions for revenues and spending. That's the thing about extraordinary times. By definition, they end. Normalcy returns.
We talk about the budget as the president's budget, and that makes sense, as the president is the one proposing it. But this is also the country's budget. It reflects not just what the president is proposing, but what's actually happening, and what's been happening. It reflects the creation of Medicare (Lyndon Johnson) and Medicare Part D (George W. Bush), Social Security (FDR) and lower marginal tax rates (Ronald Reagan). It reflects economic growth, which can't be traced to any one president, and financial crises, which are similarly diffuse.
And that tends to make presidents look both better and worse than they actually are. The giant deficits that greeted Obama were not really his fault. The bottom fell out of the tax base. Medicaid and unemployment insurance both became much bigger because so many people needed their help. That might have been his problem, but it was not his fault.
And the same goes for the return to normalcy. The spending freeze and a handful of other policies might shave the deficit from about 5 percent of GDP to 4 percent of GDP. But what's bringing it down from 10 percent of GDP is the expected economic recovery. The Obama administration deserves some of the credit for that recovery, but not all of it, and many of the critical policies (like TARP) were passed before they came into office.
Commentary on this budget will focus on Obama and "his" deficits, but the reality is that the vast majority of this budget is ours, and the story it tells is only about Obama on the margins.
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