From Capital Gains and Games:
How Much Bigger Is the Obama Deficit? Ed Lazear, former chairman of the Council of Economic Advisers with the Bush administration, said on CNBC this past Friday that he was not happy with the Obama administration’s projected $1.5 trillion fiscal 2009 deficit. But as I’ve pointed out before, the Obama deficit is not all that different from what would have occurred had President George W. Bush remained in office and Lazear still been the CEA chairman.
As Bush was leaving Washington, the Congressional Budget Office estimated that the 2009 deficit would be around $1.2 trillion. A month or so later, Congress and Obama agreed to something that the Bush administration would have strongly supported, yet another one-year patch for the alternative minimum tax. That added around $70 billion to the deficit.
The $1.2 trillion estimate also didn’t include a supplemental appropriation for activities in Iraq and Afghanistan for this year. Although Bush didn’t request a supplemental before he left, he certainly would have had he been in office. Obama requested $75 billion for this in his budget.
These two additional expenditures increase the $1.2 trillion to about $1.35 trillion. Add to that the effect of the economy not performing quite as well as had been assumed when the original $1.2 trillion estimate was released, and you’re not that far away from what Lazear said was the Obama number.
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