Reduced By Half Or Increased By A Quarter?

President Obama has frequently promoted his proposed budget as reducing the (inherited) deficit by half. The President’s choice of presentation is interesting.

The $1 trillion deficit he claims he inherited (ignoring the questionable math need to arrive at that figure) consists of the $400 billion deficit of the 2009 Bush budget, $350 billion of TARP funds authorized by the Bush administration, and slightly less than $200 billion in reduced revenue than projected in 2008.

Looking forward, does the 2013 budget include $350 billion of TARP spending? No. Does it assume no economic growth? No, quite the contrary.

So what does President Obama’s budget accomplish? It raises the deficit $126 billion from the 2009 pre-emergency budget. Or about a quarter.

If you consider that the 2009 budget defict also includes around $180 billion in “off budget” Iraq/Afghanistan operations that the 2013 budget does not fund, then an “apples to apples” assessment might be 

‘doubles the deficit’

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