Obama Misleads On Budget-National Debt Claim: PolitiFact

President Obama gestures during Tuesday, Feb. 15, 2011 news conference. i i

hide captionPresident Obama gestures during Tuesday, Feb. 15, 2011 news conference.

Evan Vucci/ASSOCIATED PRESS
President Obama gestures during Tuesday, Feb. 15, 2011 news conference.

President Obama gestures during Tuesday, Feb. 15, 2011 news conference.

Evan Vucci/ASSOCIATED PRESS

When you enter the realm of federal budgeting, you enter the Beltway funhouse with its fiscal hall of mirrors.

It allows for a lot of distortion and, according to PolitiFact, President Obama has engaged in some.

For instance, the president claimed in his Tuesday news conference that his just proposed fiscal year 2012 budget wouldn't add to the federal debt by the middle of the decade.

Most people would take that to mean that if his budget, with its ten-years' worth of assumptions, were somehow enacted, federal spending wouldn't add to the federal debt.

But most people would be wrong, according to PolitiFact. Indeed, federal spending would still add to the national debt at the middle of the decade and beyond under Obama's budget.

So the president's claim is fairly easily shown as false, PolitiFact says.

How could the president make such a baldfaced claim? Was there some cockeyed way he was using to make the claim at least somewhat plausibly in his own mind?

PolitiFact thinks the president was trying to communicate that it wouldn't be spending on programs that would expand the national debt.

Instead, Obama seemed to claim it would be interest payments for all the borrowing the federal government has had to do that would add to the debt.

PolitiFact says the president, in short, was trying to pull a fast one.

"This is what public finance economists refer to as 'primary spending' or 'primary balance,'" said Dan Mitchell, an economist with the libertarian Cato Institute. "But the White House is using these technical concepts in a very misleading way. Very misleading."

If the president can somehow work with Congress to get his budget enacted, he'd have reason to boast that his plan would make annual spending — minus interest — equal annual revenues for the first time in years in 2017. That would be an accomplishment, but it doesn't equal "not adding to the debt anymore." Because of interest costs — which amount to $884 billion in 2021 alone — the debt is projected to grow during every year of the president's budget. (It's also a bit of an exaggeration to call 2017 "the middle of this decade.")

We think the president's statement is likely to mislead a lot of Americans about what his budget would do. So we rate Obama's statement False.

UPDATE: Shortly after we posted this article, the White House responded to an earlier request for comment, arguing that Obama was not referring to actual dollars but to the fact that the budget will not increase the debt as a share of the economy. While it's true that the debt as a proportion of GDP – at least when adjusted for financial assets held by the government – would fall slightly between 2013 and 2017 (from 67.7 percent to 66.8 percent), that's not the explanation Obama gave in the news conference. Our rating is unchanged.

Fortunately for Obama, Rep. Joe Wilson (R-SC) was nowhere nearby when the president made this claim about his budget proposal and the national debt.

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