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Days after the nonpartisan Congressional Budget Office (CBO) released its latest projections, House Republicans on Friday announced their latest ransom demand for raising the debt ceiling. Speaker John Boehner's minions will vote to avoid a U.S. default and a global economic calamity if the Medicare "doc" fix is patched for nine months and cuts to veterans' pensions are restored. But to get a one-year debt limit increase, the extra costs Republicans would incur must be offset "by an extra year of cuts to mandatory spending and changes to pension contributions."

President Obama and his Democratic allies in Congress should just say no. After all, Speaker Boehner and Senate Minority Leader Mitch McConnell gave President George W. Bush a "clean," no-strings attached debt ceiling increase. And as it turns out, federal spending has declined and Uncle Sam's annual budget deficits has been halved since Barack Obama first took the oath of office on January 20, 2009.

On January 7, 2009, CNN reported on the latest long-term budget forecast from the CBO. Two weeks before President Bush ambled out of the Oval Office, CNN explained "the U.S. budget deficit in 2009 is projected to spike to a record $1.2 trillion, or 8.3 percent of gross domestic product." With the recession in full swing and the massive TARP program passed the previous fall, CBO predicted in January 2009 that federal spending would spike to $3.543 trillion dollars while tax revenue would plummet to an anemic to $2,357 trillion. As it turned out, the final deficit figure for the 2009 fiscal year which ended on September 30, 2009, reached $1.413 trillion because of worse-than-expected tax collections ($2,105 trillion).

But as the CBO reported in its new 2014 budget forecast this week, the budget picture has improved dramatically since then.

Please read below the fold for more on this story.

As the chart above shows, federal spending is lower now than on President Obama's first day in office. Aside from a small tick up for stimulus spending in FY 2011, outlays have dropped since. Fiscal year 2013 (which concluded last September 30) saw spending to $3.45 trillion. FY 2014 is forecast to edge up to $3.54 trillion, the same level as in FY 2009. Importantly, these figures do not take inflation into account. In real terms, federal spending is now less than it was five years ago.

As the chart below shows, Uncle Sam has also staunched the flow of red ink as well. The shortfall for FY was $680 billion, less than half its 2009 level. For the next few years, the federal government's annual deficits will be at or below the four-decade historical average of around 3 percent of GDP.

Nevertheless, Rep. Cathy McMorris Rodgers used her GOP State of the Union rebuttal to warn that the president was "making their lives harder with unprecedented spending." And with Friday's disappointing January jobs report, Speaker Boehner charged, "The American people continue to ask 'where are the jobs?,' and the president clearly has no answers."

But with his proposals for infrastructure investment, aid to the states and continued assistance to the long-term unemployed, President Obama has provided answers. Yet in Washington, Republicans newly concerned about the national debt slashed non-defense discretionary spending (that is, everything outside of the military, Social Security, Medicare, Medicaid and interest on the national debt) to its lowest share of GDP since the 1950s. Meanwhile in the states, GOP-controlled governors' mansions and legislatures enacted draconian austerity programs that slashed over 750,000 jobs since 2009.

The result is that the American public sector at the federal, state and local levels combined has fewer workers than it did in 2006. The private sector has added a net of 3.5 million jobs since Barack Obama was first inaugurated, and government at all levels shed three-quarters of a million workers.

Sadly, the job losses hardly ended there.

The multiplier effect of lost consumer spending battered the private sector as well. In May, the Hamilton Project estimated that austerity at the state and local level cost the U.S. economy 2.2 million jobs. In April 2012, the Economic Policy Institute (EPI) explained why:

If public-sector employment had grown since June 2009 by the average amount it grew in the three previous recoveries (2.8 percent) instead of shrinking by 2.5 percent, there would be 1.2 million more public-sector jobs in the U.S. economy today. In addition, these extra public-sector jobs would have helped preserve about 500,000 private-sector jobs.
Meanwhile back in Capitol Hill, Republicans are once again loading rounds into the debt ceiling pistol pointed at the American economy. As an aide to Alabama GOP Senator Jeff Sessions put it, "Sen. Sessions is extremely concerned about our nation's debt and opposes authorizing increased debt without meaningful reforms to Washington spending levels."

But as the data shows, Uncle Sam doesn't have a spending or deficit problem right? The United States needs faster economic growth and more (and higher paying) jobs. That means spending more—not less. And the sooner Congress lets President Obama address the real issue, the better off we'll all be.

Originally posted to Jon Perr on Fri Feb 07, 2014 at 03:27 PM PST.

Also republished by Daily Kos.

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Comment Preferences

  •  that's the cost of a president that values (5+ / 0-)

    "bipartisanship" above all else.

    We've paid a big price over the last 6 years for this misguided policy.

    And it doesn't appease the GOP - they've gotten their inches (yards?) and not they want their miles.

    And they won't stop until someone says "enough" - and makes it stick.

  •  My memory's fuzzy, but didn't the same thing (0+ / 0-)

    happen before Clinton left office?

    "Wars of nations are fought to change maps. But wars of poverty are fought to map change." Muhammad Ali

    by blueoregon on Fri Feb 07, 2014 at 03:42:01 PM PST

  •  When the spring thaw comes and we see the (0+ / 0-)

    conditions of our roads, bridges, water and sewer lines, we will have a lightbulb click on that tells us the one in six young men in the US who have no job could be put to work correcting the problems of infrastructure, or we can just wait for the disasters to start piling up that will cost real money at higher interest rates.  The GOP is not the party of good business or they'd act on this yesterday.    

    Building a better America with activism, cooperation, ingenuity and snacks.

    by judyms9 on Fri Feb 07, 2014 at 03:44:22 PM PST

    •  Why just men? (1+ / 0-)
      Recommended by:

      Why can't women be put to work fixing our infrastructure as well?

      •  Yes, there are many capable women (0+ / 0-)

        Who could do much of the same work, especially with modern equipment that takes the labor out of it.

        Women create the entire labor force.
        Sympathy is the strongest instinct in human nature. - Charles Darwin

        by splashy on Fri Feb 07, 2014 at 06:03:10 PM PST

        [ Parent ]

        •  Yes and know ...... (1+ / 0-)
          Recommended by:
          .... especially with modern equipment that takes the labor out of it.
          that also has the effect of taking the laborer out of it. My first sanitary line job (~ '76) required 6 laborers and 4 operators and everyone stayed busy. My last; 2 laborers and 2 operators, and i was more of a consultant, trainer and doughnut getter. ;]

          The actual work can still be just as hard, there are just fewer persons doing it.

          The conundrum of robotics, machinery and computers replacing humans while human population doubles and triples will not turn out well, especially if we keep ignoring it or putting it off till we're elbow to elbow and no one is working. Wall-E was a cute movie, not a viable answer.

          21st Century America: The distracted, superficial perception of a virtual reality. Gettov Milawn

          by geez53 on Mon Feb 10, 2014 at 07:51:14 PM PST

          [ Parent ]

      •  Too late to rec. Guess i'll have to affirm your (0+ / 0-)

        rhetorical in person.

        It's part of what i did for 18 years, matching workers to work. Some women could, some couldn't. Some men could, some couldn't.

        It's a matter of muscle tone and heart. One you'll get after a couple weeks, the other you'll know the second day.

        21st Century America: The distracted, superficial perception of a virtual reality. Gettov Milawn

        by geez53 on Mon Feb 10, 2014 at 07:18:33 PM PST

        [ Parent ]

  •  Well, as a Reagan admirer, looks like (1+ / 0-)
    Recommended by:

    he's accomplished what St. Ronnie constantly gave lip service to (but had no intention of following through on).

  •  But, how did we get there (1+ / 0-)
    Recommended by:

    First, using 2009 as your base year is deceptive because it included the stimulus package.   Instead, you used FY 2009 when spending was almost $1 trillion more due to stimulus spending.

    So, 2008 the last non-stimulus Bush year would be a better baseline. In 2008, the gov't spent about 2.9 Trillion and the deficit came in at roughly 455 Billion - a then huge number.
    Of course, we've run larger deficits sometimes 3x larger every year of President Obama's tenure.

    In response to this "huge" deficit, Senator Obama said "We can’t afford another four years of the kind of deficits we’ve been seeing over the last eight. Young people, you are going to have to pay for this debt we’re piling up. We can’t afford to mortgage our children’s future on another mountain of debt."

    So to cheer that the deficit is "only" 500 billion this year is a bit  disingenuous.  Especially, when you consider that the only reason the deficit is shrinking is that the GOP House and the President's relationship is so dysfunctional that no new programs are being churned out by the House.  We might not much care for Boehner and his crew, but if Nancy Pelosi was still running the House do any of us doubt that spending would be higher and the deficit larger?

    •  Some Points to Consider (1+ / 0-)
      Recommended by:

      This diary had multiple objectives, including to a) show that contrary to GOP myth-making, Obama did not ramp up spending the moment he got into office; b) show that deficits are not an issue that require immediate attention, especially as a supposed reason for blocking a debt ceiling increase, and; c) to highlight that the spending restraint by Washington and the states has hurt the economic recovery.

      Starting with fiscal year 2009, which began on October 1, 2008, highlights the point.  On October 3, 2009, President Bush signed the $700 billion TARP program into law.  (That legislation also included a debt ceiling increase to $11.3 trillion.)  When Barack Obama took the oath of office on January 20, 2009, spending for his first year in office was projected at $3.54 trillion, with a $1.186 trillion deficit.

      As you note, the stimulus was passed in February 2009.  But its spending was spread out across three fiscal years. That, combined with lower than planned outlays for TARP, is why final FY 2009 spending did not increase once Obama took over.  The deficit was bigger, due to much smaller than expected tax revenue.

      My subtext IS that the U.S. economy would be stronger now if spending and deficits under Obama had been higher.  But for Republicans calling him a "big-spending, socialist," the numbers simply don't bear that out.

  •  The sequestration cuts that the President and dems (0+ / 0-)

    caved on play a major role I the reduction in spending and they have had a devastating impact on many.

    Reagan would be envious.

  •  A GOP President (0+ / 0-)

    SO why does the GOP hate this Republican President?  What else is there but skin color?

  •  What do you call hostage takers who don't stop (0+ / 0-)

    taking people hostage, even when their demands are repeatedly met?


    That's one more thing to add to my long list of small problems. --my son, age 10

    by concernedamerican on Mon Feb 10, 2014 at 06:32:30 PM PST

  •  umm . . . (3+ / 0-)
    Recommended by:
    Jon Perr, albrt, geez53
    Spending down, deficits halved and public sector smaller since Obama took office
    . . . this is good news??

    Dogs from the street can have all the desirable qualities that one could want from pet dogs. Most adopted stray dogs are usually humble and exceptionally faithful to their owners as if they are grateful for this kindness. -- H.M. Bhumibol Adulyadej

    by corvo on Mon Feb 10, 2014 at 06:34:55 PM PST

    •  As the Last Third of the Diary Makes Clear... (1+ / 0-)
      Recommended by:

      ...this austerity is not good news and has badly hurt the U.S. economy and American workers.

      The title simply serves to debunk right-wing mythology about the big-spending, government-expanding socialist Barack Obama.

      •  It also exposes (0+ / 0-)

        Obama's right-wing mythology.

        Not that he's alone; Carter and Clinton did a fine job of paving the way for him.

        Dogs from the street can have all the desirable qualities that one could want from pet dogs. Most adopted stray dogs are usually humble and exceptionally faithful to their owners as if they are grateful for this kindness. -- H.M. Bhumibol Adulyadej

        by corvo on Mon Feb 10, 2014 at 07:40:11 PM PST

        [ Parent ]

    •  Not Now ........ (0+ / 0-)

      Not in 1937. Modern day, flaming-haired deficit hawks need to be shot for treason or just ignored for ignorance of history. We woulda,shoulda, coulda come out of the depression, albeit more slowly, without WWII. But that's just one of those history rhyming, Mark Twain moments.

      21st Century America: The distracted, superficial perception of a virtual reality. Gettov Milawn

      by geez53 on Mon Feb 10, 2014 at 08:06:12 PM PST

      [ Parent ]

  •  just from your title - sounds like a Republican (0+ / 0-)

    dream come through...on Obama's books.

    Verkehrte Welt.

  •  I see what you're doing, Jon Perr. You are trying (1+ / 0-)
    Recommended by:

    to drag factual evidence, etc. into the situation. That won't convince  the Right-wingers.   :-}

    The right of the women of this State to be secure in their persons against unreasonable searches shall not be violated by the State legislature.

    by Mayfly on Mon Feb 10, 2014 at 06:50:04 PM PST

  •  Right wing runs on ideology, not reasoning (0+ / 0-)

    Empirical evidence of the effectiveness of progressive policies is insufficient to persuade right-wing conservatives that their policies are bad for the economy. That is because despite their pretense toward seeking deficit reduction and other fiscally positive results, it is really all about ideology. They want Obama to fail, and the blame to spread to all Democrats (with the 2014 midterms looming). They have no interest in improving the economy at all or they wouldn't even whisper the possibility of a government shutdown instead of reveling in it as they did before.

    Ginny Mayer, Ph.D. Democrat CA State Senate Candidate - SD-35 (Orange County)

    by Ginny Mayer on Mon Feb 10, 2014 at 06:53:03 PM PST

  •  Yeah, yeah, yeah... (0+ / 0-)

    ... but "Ben — GAHH — Zee!"


  •  Now that... (0+ / 0-)

    Now that Obama has shown his seriousness about the deficit, Republicans will agree to cut Social Security with him. Wait....

  •  Fewer Federal employees (1+ / 0-)
    Recommended by:

    Wonder how the "contractors" (no-bid and otherwise) are faring?

    I don't really have enough information one way or the other if we should have a "smaller government" but I'm positive we should have a "smarter government."

    Dear future generations: Please accept our apologies, We were roaring drunk on petroleum -Kurt Vonnegut

    by Anthony Page aka SecondComing on Mon Feb 10, 2014 at 07:35:17 PM PST

    •  "Privatization" is just wealth redistribution .... (1+ / 0-)

      just lower-to-higher. Which is why it can't be called wealth redistribution; cause that would be class warfare (which is what you have when the lower class figures out that the upper class is eating more of the pie than they are).

      It gets all complicated and stuff.


      21st Century America: The distracted, superficial perception of a virtual reality. Gettov Milawn

      by geez53 on Mon Feb 10, 2014 at 08:16:37 PM PST

      [ Parent ]

  •  Well: (0+ / 0-)
    Meanwhile back in Capitol Hill, Republicans are once again loading rounds into the debt ceiling pistol pointed at the American economy. As an aide to Alabama GOP Senator Jeff Sessions put it, "Sen. Sessions is extremely concerned about our nation's debt and opposes authorizing increased debt without meaningful reforms to Washington spending levels."
    If the GOP is serious about getting rid of the deficit, then let them get rid of the police state (such as getting rid of NSA, for instance), dismantle corporate welfare, and dismantle the military industrial complex. They can't have it both ways.

    "The cost of liberty is less than the price of repression." - W.E.B. Du Bois Be informed. Fight the Police State.

    by Eternal Hope on Mon Feb 10, 2014 at 07:36:12 PM PST

  •  It's pretty comical when deficit reduction is (0+ / 0-)

    equated with Republican policy as some comments say here.

    There was a Republican administration in 20 of the last 34 years and there was a deficit in all 20 of those 34 years.  Cheney flaunted Republican fiscal policy by saying Reagan proved deficits don't matter.

    Liberals abandoned Keynes decades ago and they've had nothing of their own to profess ever since.  All that remained was reaction. When the Republicans deficit spent, the Democrats grumbled about it. It was a trap.

    When the Democrats took over, the Republicans suddenly turned became deficit conscious and shrill about balancing the budget. They did it 1995 and again in 2009 and they bullied and shamed the Democrats into doing what they never did themselves when they were in charge.

    If Democrats had some fiscal policy of their own to promote, they wouldn't be so easily fooled. But if you ask, you'll find that 99 out of 100 have no idea of their own whether deficits do or don't matter. Even reacting doesn't work when Republicans have staked out both sides of that argument.

    So the sophomoric remarks about Obama being a Republican because the deficit number is down this year just means you bought the kool-aid flavor they'll sell till they switch back to deficit spenders when they take over again.

    There is no existence without doubt.

    by Mark Lippman on Mon Feb 10, 2014 at 09:54:14 PM PST

  •  Deficits mattering (0+ / 0-)

    As i understood it, Cheney's claim was that deficits didn't seem to matter much to the voting public, not that deficits did not matter economically.

  •  Just what a good GOP prez would aspire to -KEEP HO (0+ / 0-)


  •  inflation and population corrections (0+ / 0-)

    It really makes no sense to give these deficit figures without correcting for inflation and population changes. that could either be as annual real per capita deficit or, perhaps easier to find, as annual deficit as fraction of GDP. Of course either way only strengthens your point here. Anyway, it's just good form even on issues where it doesn't strengthen our points.

    Michael Weissman UID 197542

    by docmidwest on Tue Feb 11, 2014 at 08:28:32 AM PST

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