THE PLANK MARCH 5, 2009
Ramesh Ponnuru, responding to my budget post from last night, writes, "Chait may also be understating how much flim-flam is involved in Obama's deficit claims." On the contrary, I think he's underestimating how much flim-flam was involved in President Bush's budgets. Those were based on assumptions everybody knew were false -- that the military would spend no money in Iraq starting immediately even when the administration was committed to fighting indefinitely, that the Alternative Minimum Tax would be allowed to grow instead of held steady as it in fact was every year, that cuts in medicare reimbursement would go into effect rather than be suspended as they were routinely, and so on.
Obama banished these gimmicks, which has the effect of making the deficit appear much larger, because Obama uses a baseline of current policy rather than imaginary policy. Nonpartisan budget analyst Stan Collender rejoiced at the change. Ramesh cites James C. Capretta, a former Bush OMB official writing on the Corner, who calls it "a sophisticated campaign to dress up the massive budget deficits they plan to run as fiscal conservatism." He would know!
It seems to me that current policy is a better baseline than imaginary policy. By that standard, Obama reduces the budget deficit. Ramesh writes, "I don't see, though, how you can claim to be troubled by Bush's deficits and unconcerned by Obama's." I'm not! I conceded in my post that Obama would still leave it too high. But there's a big difference between a president who inherits a great situation and leaves it terrible, and one who inherits a terrible situation and makes it somewhat less-terrible. To simply bracket them both into the category of "presidents who ran deficits" ellides a crucial distinction.