Reagan vs Obama – Deficit Edition!

Did Reagan triple the deficit? Did Obama cut it in half?

I see this one on social media pretty often, and keep meaning to discuss it, so here it is.

While I understand as most people do, that Congress controls spending and the budget [1], for the sake of this argument I’m going to keep it based on president, since that is what the claim is using. Later on I will write about Congress, debt, deficits, and Presidents. I will be basing it on the last budget of the outgoing president (which covers the first year of the incoming president), to the last budget of the current president. [2]

I’m going to compare deficits, and debt ceiling increases, and ignore the “compared to Hitler” part since it’s just conjecture, and I’ve heard pretty much every President in my lifetime compared to Hitler at one point or another, and has nothing to do with deficit or debt.

Reagan Deficits and Debt Ceilings

Deficits

Reagan was in Office from Jan, 21 1981 until Jan 20, 1989. The deficit at the end 1981 was $78 billion dollars.  His last budget deficit was $152 billion dollars. So during his term he had a net increase of only double, not triple.  the deficit under Reagan reached $207 billion in 1983, two years after Reagan passed the Economic Recovery Tax Act of 1981 [3] which reduced taxes, effectively reducing tax revenue. It turned out to be too much loss of revenue, combined with increased spending, so in 1982 the Tax Equity and Fiscal Responsibility Act of 1982 [4] rescinded some of those cuts, and a few more laws in following years helped bring in more revenue, but with increased spending, decreased the budget deficit back to the $152 billion in 1989. Revenue doubled in Reagan’s 8 years, but so did spending, which in turn caused the doubling of the deficit. [5]

Year	Revenue	Spending	Deficit
1981	599,272	678,241	-78,968
1982	617,766	745,743	-127,977
1983	600,562	808,364	-207,802
1984	666,438	851,805	-185,367
1985	734,037	946,344	-212,308
1986	769,155	990,382	-221,227
1987	854,287	1,004,017	-149,730
1988	909,238	1,064,416	-155,178
1989	991,104	1,143,743	-152,639

Debt Ceilings

There were actually 17 Debt ceiling increases under Reagan, not 18: [6]

Date	Limit
September 30, 1981	999.8
September 30, 1981	1,079.8
June 28, 1982	1,143.1
September 30, 1982	1,290.2
May 26, 1983	1,389.0
November 21, 1983	1,490.0
May 25, 1984	1,520.0
July 6, 1984	1,573.0
October 13, 1984	1,823.8
November 14, 1985	1,903.8
December 12, 1985	2,078.7
August 21, 1986	2,111.0
October 21, 1986	2,300.0
May 15, 1987	2,320.0
July 30, 1987	2,320.0
August 10, 1987	2,352.0
September 29, 1987	2,800.0

Obama Deficits and Debt Ceilings

Deficits

Obama has been in office since Jan 21, 2009, and is currently (as of this writing) still in office. The deficit at the end of 2009 (Last budget under Bush) was $1.4 trillion Although the original budget under Bush would have only resulted in a $407 billion deficit (a reduction from the 2008 deficit of $459 billion) the decreased revenue from the recession (half a trillion less revenue and $600 billion more in spending in 2009 than in 2008), and added spending from the 2008 TARP [7] and 2009 Stimulus [8] increased the deficit to $1.4 trillion. In the following years, as the recession subsided, revenue began to increase again, while spending stayed the same. Revenue continued to increase from 2010 until 2014 (the latest budget) by almost a trillion dollars, while spending stayed about the same, which caused the deficit to decrease. The 2015, 2016 and 2017 (Last budget under Obama) Estimates show even more increases in revenue, and even more spending, while deficits stay at the post 2007 levels. So effectively Obama decreased the deficit not by reducing spending, or by reducing taxes, but by increasing tax revenue sustaining the half trillion dollar deficits. From 2009, until the current 2014, the deficit decreased by 2/3 after spiking to 1.4 trillion. [5]

Year	Revenue	Spending	Deficit
2009	2,104,989	3,517,677	-1,412,688
2010	2,162,706	3,457,079	-1,294,373
2011	2,303,466	3,603,059	-1,299,593
2012	2,449,988	3,536,951	-1,086,963
2013	2,775,103	3,454,647	-679,544
2014	3,021,487	3,506,089	-484,602
2015 estimate	3,176,072	3,758,577	-582,505
2016 estimate	3,525,179	3,999,467	-474,288
2017 estimate	3,754,980	4,217,798	-462,818

Debt Ceiling Increases

There have been 7 debt limit increases so far. [6]

Date	Limit
February 17, 2009	12104
December 24, 2009	12394
February 12, 2010	14294
January 30, 2012	16394
May 19, 2013	16700
February 7, 2014	17,200 and  Auto adjust
March 15, 2015	End of auto adjust

References:

[1] http://history.house.gov/Institution/Origins-Development/Power-of-the-Purse/
[2] http://www.acenet.edu/news-room/Pages/A-Brief-Guide-to-the-Federal-Budget-and-Appropriations-Process.aspx
[3] https://www.congress.gov/bill/97th-congress/house-bill/4242
[4] https://www.congress.gov/bill/97th-congress/house-bill/4961
[5] https://www.whitehouse.gov/omb/budget/Historicals
[6] https://www.whitehouse.gov/sites/default/files/omb/budget/fy2016/assets/hist01z1.xls
[7] http://www.gpo.gov/fdsys/pkg/PLAW-110publ343/html/PLAW-110publ343.htm
[8] http://www.gpo.gov/fdsys/pkg/BILLS-111hr1enr/pdf/BILLS-111hr1enr.pdf

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