The 10% President
A question raised by President Obama’s immortal line on CBS’s “60 Minutes” on Sunday—”I think that, you know, as President, I bear responsibility for everything, to some degree”—is what that degree really is. Maybe 70% or 80% of the buck stops with him? Or is it halfsies?
Nope. Now we know: It turns out the figure is 10%. The other 90% is somebody else’s fault.
This revelation came when Steve Kroft mentioned that the national debt has climbed 60% on the President’s watch. “Well, first of all, Steve, I think it’s important to understand the context here,” Mr. Obama replied. Fair enough, so here’s his context in full, with our own annotation and translation below:
“When I came into office, I inherited the biggest deficit in our history.1 And over the last four years, the deficit has gone up, but 90% of that is as a consequence of two wars that weren’t paid for,2 as a consequence of tax cuts that weren’t paid for,3 a prescription drug plan that was not paid for,4 and then the worst economic crisis since the Great Depression.5
“Now we took some emergency actions, but that accounts for about 10% of this increase in the deficit,6 and we have actually seen the federal government grow at a slower pace than at any time since Dwight Eisenhower, in fact, substantially lower than the federal government grew under either Ronald Reagan or George Bush.7”
***
Footnote No. 1: Either Mr. Obama inherited the largest deficit in American history or he won the 1944 election, but both can’t be true. The biggest annual deficit the modern government has ever run was in 1943, equal to 30.3% of the economy, to mobilize for World War II. The next biggest years were the following two, at 22.7% and 21.5%, to win it.
The deficit in fiscal 2008 was a mere 3.2% of GDP. The deficit in fiscal 2009, which began on October 1, 2008 and ran through September 2009, soared to 10.1%, the highest since 1945.
Mr. Obama wants to blame all of that on his predecessor, and no doubt the recession that began in December 2007 reduced revenues and increased automatic spending “stabilizers” like jobless insurance. But Mr. Obama conveniently forgets a little event in February 2009 known as the “stimulus” that increased spending by a mere $830 billion above the normal baseline.
The recession ended in June 2009, but spending has still kept rising. The President has presided over four years in a row of deficits in excess of $1 trillion, and the spending baseline going forward into his second term is nearly $1.1 trillion more than in fiscal 2007.
Federal spending as a share of GDP will average 24.1% over his first term including 2013. Even if you throw out fiscal 2009 and blame that entirely on Mr. Bush, the Obama spending average will be 23.8% of GDP. That compares to a post-WWII average of a little under 20%. Spending under Mr. Bush averaged 20.1% including 2009, and 19.6% if that year is left out.
Footnotes No. 2 through 4: Liberals continue to claim that the main causes of the current fiscal mess are tax rates established in, er, 2001 and 2003 and the post-9/11 wars on terror. But by 2006 and 2007, those tax rates were producing revenue of 18.2% and 18.5% of GDP, near historic norms.
Another quandary for Mr. Obama’s apologists is that he has endorsed nearly all of these policies. The 2003 Medicare drug benefit wasn’t offset by tax hikes or spending cuts, but Democrats expanded the program as part of ObamaCare.
The President also extended all the Bush tax rates in 2010 for two more years in the name of helping the economy, and he now wants to continue them for people earning under $200,000, which is where 71% of their “cost” resides. The Iraq campaign was won and beginning to be wound down when he took office, and he himself surged more troops in Afghanistan.
Footnote No. 5: Mr. Obama keeps dining out on the excuse of the recession, but that ended halfway through his first year. The main deficit problems since 2009 are a permanently higher spending base (see Footnote No. 1) and the slowest economic recovery in modern history. Revenues have remained below 16% of the economy, compared to 18% to 19% in a normal expansion.
The 2008 crisis is long over. The crisis now is Mr. Obama’s non-recovery.
Footnote No. 6: Even at face value, Mr. Obama’s suggestion that he is “only” responsible for 10% of what the government does is ludicrous. Note that in addition to his stimulus, what he calls “emergency actions” include his new health-care entitlement that will cost taxpayers $200 billion per year when fully implemented and grow annually at 8%, even using low-ball assumptions.
But the larger point concerns executive leadership. Every President “inherits” a government that was built over generations, which he chooses to change, or not to change, to suit his priorities. Mr. Obama chose to see the government he inherited and grow it faster than any President since LBJ.
The pre-eminent political question now is whether to reform the government we have to make it affordable going forward, or to keep growing the government and raise taxes to finance it, if that is even possible.
Mr. Obama favors the second option, though he pretends he can merely tax the rich to do it. Nobody who has looked honestly at the numbers believes that—not his own Simpson-Bowles commission and not the Congressional “super committee” he sanctioned but then worked to undermine.
At every turn he has demagogued the Romney-Ryan proposals to modernize the entitlement state so it is affordable, and he personally blew up the “grand bargain” House Speaker John Boehner was willing to strike last summer.
Footnote No. 7: Mr. Obama’s posture as the tightest skinflint since Eisenhower is a tutorial in how to dissemble with statistics. The growth rate seems low because he’s measuring from the end of fiscal 2009, after a one-year spending increase of $535 billion. That is the year of his stimulus and thus spending is growing off amuch higher base. The real annual pace of government growth is closer to 5%, and that doesn’t count ObamaCare.
***
In another news-making bit with “60 Minutes,” which the program decided not to air, Mr. Obama conceded that “Do we see sometimes us going overboard in our campaign, mistakes that are made, areas where there’s no doubt that somebody could dispute how we are presenting things, that happens in politics.”
Note the passive voice, as if the President’s re-election campaign is disembodied from the President. If Mr. Obama’s campaign seems dishonest enough that even Mr. Obama is forced to admit it, this is because it’s coming from the top.
A version of this article appeared September 25, 2012, on page A18 in the U.S. edition of The Wall Street Journal, with the headline: The 10% President.
I believe politicians usually tend to stretch the truth when it comes to re-election. A lot of points are interesting here. His 90% argument is a bit invalid, since he did promise to pull out of these two wars much earlier. National defense spending accounts to close to 1/4 of our spending, so I believe he would’ve save a lot of money here if he had a better and faster pullout plan. Though, popular, the Bush era tax cuts would’ve been allowed to be expired with the U.S being 17 trillion dollars in debt. Calling for another 1 year extension on these tax cuts this past July isn’t helping either; though it did help with his re-election campaign. I’m currently on the fence in regards to his healthcare plan aka obamacare. It will take some time to see how it will play out consider he had to make numerous compromises to get congress to pass it. As for the bailout out money required for the recession, i do believe it could’ve been handled better. There should have been strings attached to billions he gave to the banks as well. In short, I do agree with most of the arguments in this article.
I don’t think that the president is more liable to more than 10% of the decisions made by the government. i believe that he is liable for about 25-40% of the decisions made by the government since he has to sign on many of the decisions made by the government. I am also not a great supporter of his idea of growing the government through raising taxes to finance. well this plan does seem positive but it will lead to bigger problems for the USA economy later on when many of the rich business and people have move their company’s and wealth to other nations where they will not be taxed as high. It might cost them more money to move but if the high taxes will cost them more it will seem as the beat option they have. Also many of the candidates despite any election usually lie.
I believe that it is easy for politicians to skirt the truth because they know a large majority of the population will not research the facts they throw out. I also believe that Obama should be held responsible for not ending the wars in Iraq and Afghanistan sooner because these occupations are costing a lot of money. Even though he has declared the war in Iraq “over” they still spending billions just occupying the area not to mention shifting troops to Afghanistan has added to the debt as well. He promised to end wars and he has not done that, he promised to stimulate the economy and he has not done that. The stimulus package was a joke, how dare he give the American people small amounts of money and expect that one time payment to end the recession. As a single person I only received $250 dollars, people with dependents received more but it still didn’t cure what ailed them. It only provided temporary relief. He should have taken a page from Roosevelts hand book and forgave all debt to include student loans and mortgage payments by the American people. That would not have even totalled the amount he spent bailing the banks out. It shows you that Obama is just like all the others he “says what wants but doesn’t mean what he says”. I’m going to end with a quote I heard on a free speech radio station ” WHETHER LEFT WING OR RIGHT WING THEY ARE BOTH WINGS ON THE SAME BIRD”
Cool! I like your last quote!
He hasnt changed course from Bush spending at all, he just ramped it up (beyond what ending “bush tax cuts” would yield) He authored new spending and didn’t veto the re authorizations, he signs off on what Congress does.
100% and his lack of ownership adds interest to it.
Was it a problem of the lack of “will” or the lack of “capability” of the Obama administration? You seem to emphasize both, right? Yeah, I agree that Obama was not tough enough to push his fiscal agenda.
Ouch… “Note the passive voice, as if the President’s re-election campaign is disembodied from the President. If Mr. Obama’s campaign seems dishonest enough that even Mr. Obama is forced to admit it, this is because it’s coming from the top.” Wall Street Journal could be quite biased on their right wing terms. Truthfully, I have not been keeping up with recent news and affairs as of late, but WSJ’s coining of the term “the 10% President” seems as a ploy to offset Romney’s 47% controversy. I say WSJ’s been drinking too much Koo-laid. Of course, if you want to talk about numbers, countless adverse numbers and statistics could counter-argue Obama’s efforts in terms of dealing with the economy. But what about 30 months of consecutive job growth and 4.6 million new private sector jobs, reviving/kick-starting the auto industry, adding more than half a million manufacturing, and stablizing the financial crisis? What would you say to his achievements? Obviously, he did inherit the most horrendous economy, but to blame him as a president who is allegedly blamed for 10% of economic problems seems like a far stretch to me. WSJ just wants to throw rocks around, what a tabloid schmuck..
In my opinion the writer is unfairly criticizing the President. The writer says, “The recession ended in June 2009, but spending has still kept rising” and “Mr. Obama keeps dining out on the excuse of the recession, but that ended halfway through his first year.” It’s unfair to criticize Obama for continuing to increase spending because the recession technically ended in 2009. We are still trying to recover. The unemployment rate is still over 8 percent and no one is satisfied with where we currently are. I believe that his attempt at lowering that number by continuing to increase deficit spending to grow the economy is a justifiable response to the messed up economy he inherited. The writer also says “Every President “inherits” a government that was built over generations, which he chooses to change, or not to change, to suit his priorities.” Not every President inherits an economy that is losing 800,000 jobs a month!
I do disagree with the President’s decision to expand the longest war in U.S. history during an economic recovery. I think it was a huge mistake and seems to look worse everyday.
Also in the 60 minutes interview the President said “us”, “our” and “we” twice. I’d hardly call that an attempt to disembody himself from the campaign…
Andrew, a very balanced opinion. I like it.
I agree with the view presented in this argument, because like the author stated in his opening remarks, Obama seems to blame everyone else for progress that should have already been developing during his first term. It is unacceptable to claim that you are attacking the economy with great policies, but act in a complete opposite direction. The deficit has been the greatest deficit ever implemented under any president before (more than every presidents spending added together), the unemployment rate continues to be around 8% including those who gave up looking for work, and the economy barley growing if growing at all. When Mr. Obama is asked about these issues, he continues to say we’re working on it, or were better now than four years ago. Is that true? Many beg to differ considering the three point mentioned above. I feel that this article is an attack of Mr. Obama and his policies, but when the policies are getting us no where, and maybe even sending us deeper into the pit of a declining economy, someone needs to stand up and say something. I agree with the content of this article.
So what president said is that he has only 10% of the responsibilities and rest is all others. Nice… Sweeeeeet… These are the words that comes to my mind. He has a good attitude going forward and blaming of all the deficit or other hardship on others. Absolutely awesome!!!! Everyone should come forward and blame others for it. That is an easy task to do and that is what he is doing. He is taking an easy way out and not taking a burden of the crisis. He just takes only 10% of the responsibility of ending the war late in Iraq, compared to what he said during his election in 2008. He said in 2008 election that his priority is going to bring back the troops and end the war. It took him 2 or 3 years to end it. This war cost us billions of dollars; increasing our debts. And in that billions only 10% is what he is responsible for; the rest is the other members in the government.