PRESIDENT BARACK OBAMA: “The fact of the matter is, is that when we came into office, the deficit was $1.3 trillion. So when you say that suddenly I’ve got a monthly budget that is higher than the annual — or a monthly deficit that’s higher than the annual deficit left by Republicans, that’s factually just not true, and you know it’s not true.”
THE FACTS: Obama argues that the federal budget in 2000 had a surplus of $200 billion. He says two tax cuts, two wars and a Medicare drug plan eliminated that surplus over the next eight years. It is true that the budget in 2001, as Bill Clinton left the White House, had a $236 billion surplus. By the time Obama took office, the Congressional Budget Office estimated the annual deficit at $1.2 trillion.
At the time, CBO projected a $4 trillion deficit over the next 10 years. Obama placed the 10-year deficit he inherited at $8 trillion, the figure used by the Office of Management and Budget.
The difference is because CBO assumed the Bush tax cuts would expire and that taxes would increase and bring in new revenue. The OMB projections assume a continuation of current law — a more realistic scenario — thus the higher number.
A congressman, Rep. Jeb Hensarling of Texas, asserted that “what were the old annual deficits under Republicans have now become the monthly deficits under Democrats.” He did not say, as Obama claimed, that the monthly deficits were higher than the deficit “left by Republicans.”
Still, Hensarling’s claim is based on a selective use of data. Monthly deficits in 2009 ranged from a low of $21 billion in April to a high of $193 billion in February.
The annual deficits under Bush, when Republicans controlled Congress, ranged from $158 billion in 2002 to $413 billion in 2004. The Associated Press
