Tonight, President Obama will deliver the State of the Union address. In addition to the lofty rhetoric and self congratulations, the president will likely claim that the federal government’s budget has improved during his tenure.
It is true that the deficit has decreased in recent years due partly to large tax increases, which have helped the government but not the economy. Also, spending levels have stabilized, partly due to Republican efforts to slow discretionary spending growth. However, these are temporary trends. Spending is expected to explode in coming years, which will fuel larger deficits and higher levels of debt. The nation’s longer term fiscal outlook is a mess.
Comparing today’s budget situation to the situation at the beginning of President Obama’s tenure is difficult. President Obama took office in January of 2009, several months into fiscal year 2009. Spending in 2009 was $3.5 trillion, up from $3.0 trillion in 2008. Part of the higher spending in 2009 was attributable to the Bush administration, but President Obama’s big stimulus bill passed in February 2009 also added to the increase.