Dick Morris and  Eileen McGann

President Obama was disingenuous when he said that the budget deficit he faced "when I walked in the door" of the White House was $1.3 trillion. He went on to say that he only increased it to $1.4 trillion in 2009 and was raising it to $1.6 trillion in 2010.

As Joe Wilson said, "You lie."

Here are the facts:

In 2008, George W. Bush ran a deficit of $485 billion. By the time the fiscal year started on Oct.1, 2008, it had gone up by another $100 billion due to increased recession-related spending and depressed revenues. So it was $600 billion. That was the real Bush deficit.

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But when the fiscal crisis hit, Bush had to pass TARP in the final months of his presidency, which cost $700 billion. Under the federal budget rules, a loan and a grant are treated the same. So the $700 billion pushed the deficit -- officially -- up to $1.3 trillion. But not really. The $700 billion was a short-term loan, and $500 billion of it has already been repaid.

So what was the real deficit Obama inherited? The $600 billion deficit Bush was running plus the $200 billion of TARP money that probably won't be repaid (mainly AIG and Fannie Mae and Freddie Mac). That totals $800 billion. That was the real deficit Obama inherited.

Then ... he added $300 billion in his stimulus package, bringing the deficit to $1.1 trillion. And falling revenues and other increased welfare spending pushed it up to $1.4 trillion.

So, effectively, Obama came close to doubling the deficit.

His program of fiscal austerity in this new budget is a joke. If he wanted to lower the deficit, here's what he could do:

-- Cancel the remaining $500 billion of stimulus spending.

-- Cancel the $300 billion of spending in stimulus II.

Presto! The deficit is cut in half.

Those are the real numbers.


Dick Morris and Eileen McGann

Dick Morris, a former political adviser to Sen. Trent Lott (R-Miss.) and President Bill Clinton, is the author of 2010: Take Back America. To get all of Dick Morris’s and Eileen McGann’s columns for free by email, go to www.dickmorris.com
 


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