From Media Matters:
Right-wing media are now targeting Minority Leader Nancy Pelosi as being to blame for the increase in the federal deficit. In fact, experts agree that almost the entire deficit can be attributed to Bush's tax cuts, the wars in Afghanistan and Iraq, and the economic recession.
Right-Wing Media Mock Pelosi's Statement On Deficit Reduction
Fox Nation Declares Pelosi's Statement On Deficit Reduction Being A "Priority" To Be "A Whopper." On January 4, Fox Nation posted video of Pelosi speaking at her final news conference as House speaker. During the clip, Pelosi said:
PELOSI: We have no regrets. This House has over and over again sent to the Senate legislation for job creation, which the Republicans in the Senate held up. Deficit reduction has been a high priority for us. It is our mantra: pay as you go. Unfortunately, that will be changed now. This administration and this Congress inherited a near depression. And so the initiatives that we took were positive for the American people. [Fox Nation, 1/4/11]
Fox Nation posted this text below the video:
At her final press conference as House Speaker, Nancy Pelosi (D-CA) said, "Deficit reduction has been a high priority for us. It is our mantra, pay-as-you-go."
The numbers tell a different story.
When the Pelosi Democrats took control of Congress on January 4, 2007, the national debt stood at $8,670,596,242,973.04. The last day of the 111th Congress and Pelosi's Speakership on December 22, 2010 the national debt was $13,858,529,371,601.09 - a roughly $5.2 trillion increase in just four years. Furthermore, the year over year federal deficit has roughly quadrupled during Pelosi's four years as speaker, from $342 billion in fiscal year 2007 to an estimated $1.6 trillion at the end of fiscal year 2010. [Fox Nation, 1/4/11]
Hoft: "Speaker Pelosi's Final Insult: 'Deficit Reduction Has Been A High Priority.'" In a January 4 Gateway Pundit post, Jim Hoft posted Fox Nation's video and text and added, "What a horrible woman." [Gateway Pundit, 1/4/11]
Doocy On Pelosi's Comments: "Maybe The Spin Should Stop Here, Madam Speaker." The January 5 edition of Fox & Friends began with a segment on Pelosi's comments. After airing part of the Fox Nation clip of Pelosi speaking, the co-hosts said:
STEVE DOOCY (co-host): Now, hold on. Maybe the spin should stop here, Madam Speaker, because when you look at what she just said -- that deficit reduction has been a high priority under her gavelship -- that flies in the face of the facts. Because when she took the big hammer from John Boehner a couple of years ago, the debt was at $8.6 trillion.
BRIAN KILMEADE (co-host): Drop in the bucket.
DOOCY: That's right. As the 111th Congress concluded in December, it was at $13.8 trillion, a $5.2 trillion increase on her watch.
GRETCHEN CARLSON (co-host): I wish I would have brought my calculator this morning, because you need it for these kind of numbers, although I --
DOOCY: They're so big.
CARLSON: I don't know if calculators go to the trillions. So, if you want to break it down even more, Steve, the year-over-year federal deficit has roughly quadrupled, can't even say it, during Pelosi's four years as speaker. So, year over year, it's quadrupled. I guess that means that it's four times over every single year. [Fox News' Fox & Friends, 1/5/11]
Fox & Friends ran repeated segments throughout the January 5 broadcast in which they accused Pelosi of being responsible for the rising deficit during her tenure. In addition, contrary to Doocy's claim, Pelosi did not take "the big hammer from John Boehner a couple of years ago." In fact, Pelosi succeeded former Speaker of the House Dennis Hastert (R-IL). [Office of the Clerk, accessed 1/5/11]
Powers: "They're Saying Boehner Has An Emotional Imbalance?" In a January 5 post on Michelle Malkin's blog titled, "Pelosi Departs With a Whopper," blogger Doug Powers reposted Fox Nation's text and added, "And they're saying Boehner has an emotional imbalance?" [MichelleMalkin.com, 1/5/11]
But Experts Agree Deficit Result Of Bush-Era Policies, Wars, Economic Downturn
CBO Projected $1.2T Deficit In January 2009 Based On Spending Bush Authorized; Actual Deficit Was $1.4T. In a January 7, 2009, report, the Congressional Budget Office (CBO) projected, based on spending authorized under the Bush administration, that the federal deficit in FY2009 would total $1.2 trillion. According to the CBO, the actual federal deficit for FY2009 was $1.4 trillion. [CBO, January 2009 and January 2010]
CAP: "Single Most Important [Cause Of The Deficit] Is The Legacy Of President George W. Bush's Legislative Agenda." In an August 2009 analysis, the Center for American Progress (CAP) concluded that about two-thirds of the then-projected budget deterioration for 2009 and 2010 could be attributed to either Bush's policies or the economic downturn:
deficitchart
The report explained:
As for the deficit's cause, the single most important factor is the legacy of President George W. Bush's legislative agenda. Overall, changes in federal law during the Bush administration are responsible for 40 percent of the short-term fiscal problem. For example, we estimate that the tax cuts passed during the Bush presidency are reducing government revenue collections by $231 billion in 2009. Also, because of the additions to the federal debt due to Bush administration policies, the government will be paying $218 billion more in interest payments in 2009.
Had President Bush not cut taxes while simultaneously prosecuting two foreign wars and adopting other programs without paying for them, the current deficit would be only 4.7 percent of gross domestic product this year, instead of the eye-catching 11.2 percent--despite the weak economy and the costly efforts taken to restore it. In 2010, the deficit would be 3.2 percent instead of 9.6 percent.
The weak economy also plays a major role in the deficit picture. The failure of Bush economic policies--fiscal irresponsibility, regulatory indifference, fueling of an asset and credit bubble, a failure to focus on jobs and incomes, and inaction as the economy started slipping--contributed mightily to the nation's current economic situation. When the economy contracts, tax revenues decline and outlays increase for programs designed to keep people from falling deep into poverty (with the tax impact much larger than the spending impact). All told, the weak economy is responsible for 20 percent of the fiscal problems we face in 2009 and 2010.
President Obama's policies have also contributed to the federal deficit--but only 16 percent of the projected budget deterioration for 2009 and 2010 are attributable to those policies. The American Recovery and Reinvestment Act, designed to help bring the economy out of the recession is, by far, the largest single additional public spending under this administration. [CAP, 8/25/09]
CBPP: "[V]irtually The Entire Deficit Over The Next Ten Years" Due To Bush Policies, Economic Downturn." The Center on Budget and Policy Priorities (CBPP) published an analysis of federal deficits in December 2009, most recently updated on June 28, 2010, titled, "Critics Still Wrong on What's Driving Deficits in Coming Years: Economic Downturn, Financial Rescues, and Bush-Era Policies Drive the Numbers." The report noted:
Some critics continue to assert that President George W. Bush's policies bear little responsibility for the deficits the nation faces over the coming decade -- that, instead, the new policies of President Barack Obama and the 111th Congress are to blame. Most recently, a Heritage Foundation paper downplayed the role of Bush-era policies (for more on that paper, see p. 4). Nevertheless, the fact remains: Together with the economic downturn, the Bush tax cuts and the wars in Afghanistan and Iraq explain virtually the entire deficit over the next ten years. [CBPP, updated 6/28/10, emphasis in original]
Harvard Business Review Group Director: "[T]he Giant Deficit Is Mainly The Result Of The Collapse In Tax Receipts Brought On By The Recession." In an October 2010 post on his Reuters blog, Justin Fox, editorial director of the Harvard Business Review Group, analyzed the deficit and concluded that it was "mainly the result of the collapse in tax receipts brought on by the recession":
The Treasury Department reported on Oct. 15 that the deficit in fiscal 2010, which ended Sept. 30, was $1.294 trillion. That's less than FY 2009's $1.416 trillion, but it's still really really big. Why is it so big, though? Is it because of all that stimulus and bailout spending? Or is something else going on?
To find out, I created a fantasy world. I figured out how fast federal spending and revenue grew over the last business cycle, from 2000 through 2007, and calculated where we'd be today if those growth rates had continued through 2010. I was originally motivated to do this for a commentary that's supposed to air tomorrow night on Nightly Business Report. But I'm thinking there's not a huge overlap between Felix Salmon readers and Nightly Business Report viewers, so I'll go ahead and share what I learned.
In my no-financial-crisis, no-bailout, no-recession, no-stimulus scenario, spending kept growing at 6.22% a year, and revenue kept growing at 3.45%. You can see from the difference between the two numbers that this was an unsustainable path. But it clearly could have been sustained for a few more years.
Where would it have left us in fiscal 2010? With $2.843 trillion in federal revenue and $3.270 trillion in spending, leaving a deficit of $427 billion. The actual revenue and spending totals for 2010 were $2.162 trillion and $3.456 trillion. So spending was $186 billion higher than if we'd stuck to the trend, and revenue was $681 billion lower. In other words, the giant deficit is mainly the result of the collapse in tax receipts brought on by the recession, not the increase in spending. Nice to know, huh? [Justin Fox, blogs.reuters.com, 10/25/10, emphasis added]
Wednesday, January 05, 2011
Right-Wing Media's Phony Deficit Blame Game Now Targets Pelosi
From Media Matters:
Right-wing media are now targeting Minority Leader Nancy Pelosi as being to blame for the increase in the federal deficit. In fact, experts agree that almost the entire deficit can be attributed to Bush's tax cuts, the wars in Afghanistan and Iraq, and the economic recession.
Right-Wing Media Mock Pelosi's Statement On Deficit Reduction
Fox Nation Declares Pelosi's Statement On Deficit Reduction Being A "Priority" To Be "A Whopper." On January 4, Fox Nation posted video of Pelosi speaking at her final news conference as House speaker. During the clip, Pelosi said:
PELOSI: We have no regrets. This House has over and over again sent to the Senate legislation for job creation, which the Republicans in the Senate held up. Deficit reduction has been a high priority for us. It is our mantra: pay as you go. Unfortunately, that will be changed now. This administration and this Congress inherited a near depression. And so the initiatives that we took were positive for the American people. [Fox Nation, 1/4/11]
Fox Nation posted this text below the video:
At her final press conference as House Speaker, Nancy Pelosi (D-CA) said, "Deficit reduction has been a high priority for us. It is our mantra, pay-as-you-go."
The numbers tell a different story.
When the Pelosi Democrats took control of Congress on January 4, 2007, the national debt stood at $8,670,596,242,973.04. The last day of the 111th Congress and Pelosi's Speakership on December 22, 2010 the national debt was $13,858,529,371,601.09 - a roughly $5.2 trillion increase in just four years. Furthermore, the year over year federal deficit has roughly quadrupled during Pelosi's four years as speaker, from $342 billion in fiscal year 2007 to an estimated $1.6 trillion at the end of fiscal year 2010. [Fox Nation, 1/4/11]
Hoft: "Speaker Pelosi's Final Insult: 'Deficit Reduction Has Been A High Priority.'" In a January 4 Gateway Pundit post, Jim Hoft posted Fox Nation's video and text and added, "What a horrible woman." [Gateway Pundit, 1/4/11]
Doocy On Pelosi's Comments: "Maybe The Spin Should Stop Here, Madam Speaker." The January 5 edition of Fox & Friends began with a segment on Pelosi's comments. After airing part of the Fox Nation clip of Pelosi speaking, the co-hosts said:
STEVE DOOCY (co-host): Now, hold on. Maybe the spin should stop here, Madam Speaker, because when you look at what she just said -- that deficit reduction has been a high priority under her gavelship -- that flies in the face of the facts. Because when she took the big hammer from John Boehner a couple of years ago, the debt was at $8.6 trillion.
BRIAN KILMEADE (co-host): Drop in the bucket.
DOOCY: That's right. As the 111th Congress concluded in December, it was at $13.8 trillion, a $5.2 trillion increase on her watch.
GRETCHEN CARLSON (co-host): I wish I would have brought my calculator this morning, because you need it for these kind of numbers, although I --
DOOCY: They're so big.
CARLSON: I don't know if calculators go to the trillions. So, if you want to break it down even more, Steve, the year-over-year federal deficit has roughly quadrupled, can't even say it, during Pelosi's four years as speaker. So, year over year, it's quadrupled. I guess that means that it's four times over every single year. [Fox News' Fox & Friends, 1/5/11]
Fox & Friends ran repeated segments throughout the January 5 broadcast in which they accused Pelosi of being responsible for the rising deficit during her tenure. In addition, contrary to Doocy's claim, Pelosi did not take "the big hammer from John Boehner a couple of years ago." In fact, Pelosi succeeded former Speaker of the House Dennis Hastert (R-IL). [Office of the Clerk, accessed 1/5/11]
Powers: "They're Saying Boehner Has An Emotional Imbalance?" In a January 5 post on Michelle Malkin's blog titled, "Pelosi Departs With a Whopper," blogger Doug Powers reposted Fox Nation's text and added, "And they're saying Boehner has an emotional imbalance?" [MichelleMalkin.com, 1/5/11]
But Experts Agree Deficit Result Of Bush-Era Policies, Wars, Economic Downturn
CBO Projected $1.2T Deficit In January 2009 Based On Spending Bush Authorized; Actual Deficit Was $1.4T. In a January 7, 2009, report, the Congressional Budget Office (CBO) projected, based on spending authorized under the Bush administration, that the federal deficit in FY2009 would total $1.2 trillion. According to the CBO, the actual federal deficit for FY2009 was $1.4 trillion. [CBO, January 2009 and January 2010]
CAP: "Single Most Important [Cause Of The Deficit] Is The Legacy Of President George W. Bush's Legislative Agenda." In an August 2009 analysis, the Center for American Progress (CAP) concluded that about two-thirds of the then-projected budget deterioration for 2009 and 2010 could be attributed to either Bush's policies or the economic downturn:
deficitchart
The report explained:
As for the deficit's cause, the single most important factor is the legacy of President George W. Bush's legislative agenda. Overall, changes in federal law during the Bush administration are responsible for 40 percent of the short-term fiscal problem. For example, we estimate that the tax cuts passed during the Bush presidency are reducing government revenue collections by $231 billion in 2009. Also, because of the additions to the federal debt due to Bush administration policies, the government will be paying $218 billion more in interest payments in 2009.
Had President Bush not cut taxes while simultaneously prosecuting two foreign wars and adopting other programs without paying for them, the current deficit would be only 4.7 percent of gross domestic product this year, instead of the eye-catching 11.2 percent--despite the weak economy and the costly efforts taken to restore it. In 2010, the deficit would be 3.2 percent instead of 9.6 percent.
The weak economy also plays a major role in the deficit picture. The failure of Bush economic policies--fiscal irresponsibility, regulatory indifference, fueling of an asset and credit bubble, a failure to focus on jobs and incomes, and inaction as the economy started slipping--contributed mightily to the nation's current economic situation. When the economy contracts, tax revenues decline and outlays increase for programs designed to keep people from falling deep into poverty (with the tax impact much larger than the spending impact). All told, the weak economy is responsible for 20 percent of the fiscal problems we face in 2009 and 2010.
President Obama's policies have also contributed to the federal deficit--but only 16 percent of the projected budget deterioration for 2009 and 2010 are attributable to those policies. The American Recovery and Reinvestment Act, designed to help bring the economy out of the recession is, by far, the largest single additional public spending under this administration. [CAP, 8/25/09]
CBPP: "[V]irtually The Entire Deficit Over The Next Ten Years" Due To Bush Policies, Economic Downturn." The Center on Budget and Policy Priorities (CBPP) published an analysis of federal deficits in December 2009, most recently updated on June 28, 2010, titled, "Critics Still Wrong on What's Driving Deficits in Coming Years: Economic Downturn, Financial Rescues, and Bush-Era Policies Drive the Numbers." The report noted:
Some critics continue to assert that President George W. Bush's policies bear little responsibility for the deficits the nation faces over the coming decade -- that, instead, the new policies of President Barack Obama and the 111th Congress are to blame. Most recently, a Heritage Foundation paper downplayed the role of Bush-era policies (for more on that paper, see p. 4). Nevertheless, the fact remains: Together with the economic downturn, the Bush tax cuts and the wars in Afghanistan and Iraq explain virtually the entire deficit over the next ten years. [CBPP, updated 6/28/10, emphasis in original]
Harvard Business Review Group Director: "[T]he Giant Deficit Is Mainly The Result Of The Collapse In Tax Receipts Brought On By The Recession." In an October 2010 post on his Reuters blog, Justin Fox, editorial director of the Harvard Business Review Group, analyzed the deficit and concluded that it was "mainly the result of the collapse in tax receipts brought on by the recession":
The Treasury Department reported on Oct. 15 that the deficit in fiscal 2010, which ended Sept. 30, was $1.294 trillion. That's less than FY 2009's $1.416 trillion, but it's still really really big. Why is it so big, though? Is it because of all that stimulus and bailout spending? Or is something else going on?
To find out, I created a fantasy world. I figured out how fast federal spending and revenue grew over the last business cycle, from 2000 through 2007, and calculated where we'd be today if those growth rates had continued through 2010. I was originally motivated to do this for a commentary that's supposed to air tomorrow night on Nightly Business Report. But I'm thinking there's not a huge overlap between Felix Salmon readers and Nightly Business Report viewers, so I'll go ahead and share what I learned.
In my no-financial-crisis, no-bailout, no-recession, no-stimulus scenario, spending kept growing at 6.22% a year, and revenue kept growing at 3.45%. You can see from the difference between the two numbers that this was an unsustainable path. But it clearly could have been sustained for a few more years.
Where would it have left us in fiscal 2010? With $2.843 trillion in federal revenue and $3.270 trillion in spending, leaving a deficit of $427 billion. The actual revenue and spending totals for 2010 were $2.162 trillion and $3.456 trillion. So spending was $186 billion higher than if we'd stuck to the trend, and revenue was $681 billion lower. In other words, the giant deficit is mainly the result of the collapse in tax receipts brought on by the recession, not the increase in spending. Nice to know, huh? [Justin Fox, blogs.reuters.com, 10/25/10, emphasis added]
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