Obama's Prime Time Pitch

If $1.3 trillion is the starting point, it is roughly accurate to say that Obama is proposing to cut the figure in half. CBO's most recent projections of Obama's budget put the deficit in fiscal 2013 (the last budget that would come from Obama's current term in office) at $672 billion. That's a 48 percent reduction from $1.3 trillion. The reduction would be even greater under the more optimistic projections from his own Office of Management and Budget. OMB projects the deficit will be about $533 billion in fiscal 2013, amounting to a cut of 59 percent.

However, both OMB and CBO predict that deficits would begin to shoot up again after the initial four-year period. OMB predicts a rise to $712 billion in 2019, and CBO forecasts a much sharper rise, reaching more than $1 trillion in fiscal 2018 and nearly $1.19 trillion in 2019 – about the same amount Obama inherited upon entering office.

Anger Management
Obama said he was "angry" about those "inexcusable" AIG bonuses, and called for Wall Street to restrain its "outsized" pay:

Obama: I'm as angry as anybody about those bonuses that went to some of the very same individuals who brought our financial system to its knees, partly because it's yet another symptom of the culture that led us to this point. But one of the most important lessons to learn from this crisis is that our economy only works if we recognize that we're all in this together, that we all have responsibilities to each other and to our country. Bankers and executives on Wall Street need to realize that enriching themselves on the taxpayers' dime is inexcusable, that the days of outsized rewards and reckless speculation that puts us all at risk have to be over.

We don't dispute that the president felt angry; that's for him to say. It's worth noting, however, that Obama's own administration opposed tough rules, passed by the Senate, that might have prevented AIG from handing out those bonuses in the first place.

As we explained last week, an amendment introduced by Sen. Chris Dodd and passed by voice vote in the Senate called for any institution that still needed to pay back money issued under the Troubled Assets Relief Program to be prohibited from paying "any bonus, retention award, or incentive compensation" to at least the top 25 employees on the payroll. That became part of the Senate version of the massive stimulus bill. But in February, the administration expressed concern that banks would be reluctant to accept help under those rules, and Dodd's amendment was watered down substantially by Democratic lawmakers who drafted a Senate-House compromise version of the stimulus package. Last week, Treasury Secretary Timothy Geithner said that his department thought the Dodd prohibition wouldn't withstand legal challenges. Dodd has said he reluctantly went along with a weaker ban as part of the final legislation, which instead stipulated that bonuses could be issued if they were part of contracts signed before Feb. 11.

Exaggerating Homelessness
Not all the errors came from the president. Kevin Chappell of Ebony magazine asked a misleading question about homelessness and the recession.

Chappell: A recent report found that, as a result of the economic downturn, 1 in 50 children are now homeless in America. With shelters at full capacity, tent cities are sprouting up across the country. In passing your stimulus package, you said that help was on the way. But what would you say to these families, especially children, who are sleeping under bridges and in tents across the country?

A study from the National Center on Family Homelessness, released March 9, did find that 1 in 50 children, or 2 percent of all children in the U.S., are homeless at some point during the year. But NCFH has a broader definition for homelessness than Chappell implies. Its definition isn't restricted to children who are "sleeping under bridges and in tents." It also includes children whose families are staying with friends or family members, in hotels and motels, in trailer parks or in "substandard" housing.

This is the definition used in the McKinney-Vento Homeless Assistance Act and a number of other pieces of legislation, but not the definition used by the U.S. Department of Housing and Urban Development. HUD considers families homeless only if they are sleeping on the streets, in shelters or in places not designated for human habitation.

Furthermore, Chappell was wrong to claim that the 2 percent "homeless" figure is "a result of the economic downturn." The NCFH study looked at data from 2005 to 2006 – well before the current recession started. The National Bureau of Economic Research says the current slump began in December 2007.

Chappell would be right to say that by any estimate the number of homeless children is significant even in good times, and is likely to be higher now. A 2000 study from the Urban Institute estimated that 1 million children (1.4 percent) were using assistance services and shelters at some point each year, "despite a booming economy and the lowest unemployment rate in a generation."

Chappell would also be justified in saying too many children actually are "sleeping under bridges and in tents." A 2008 report from the U.S. Conference of Mayors gives a rough idea of how many that might be. Based on data from 23 cities, the report estimated that on an average night in an average city 543 people in families (both children and adults) and 268 unaccompanied youth were sleeping on the street. That's an unfortunate figure, but nowhere close to 1 child in 50.

Republished with permission from factcheck.org .

Sources
Elmendorf, Douglas. "CBO's Economic Projections." 23 March 2009. Congressional Budget Office Director's Blog, 25 March 2009.

Orszag, Peter. "Economic forecasts and the Budget: Consistency with CBO." 28 February 2009. OMB Blog, 25 March 2009.

Romer, Christina. "Economic Projections and the Budget Outlook." 28 February 2009. Council of Economic Advisers, 25 March 2009.

National Center on Family Homelessness. "America's Young Outcasts," March 2009.

U.S. Department of Housing and Urban Development. "Federal Definition of Homeless," Aug. 2007.

United States Conference of Mayors. "Hunger and Homelessness Survey," Dec. 2008.

© 2009