National Debt Under Obama

Three Methods to Determine How Much Obama Added to the Debt

President Obama
••• The U.S. Army/

Depending on who you ask, President Barack Obama added anywhere from $983 billion to $9 trillion to the national debt. With such a big gap, you might be wondering who's lying. None of them, because there are three ways to look at the debt added by any president.

The first, and most common, method is to subtract the debt level when Obama took office from the debt level when he left. The second, and more accurate, method is to add together Obama’s projected budget deficits. The third method is the fairest but also the most complicated. It adds just the deficits created by the president's specific initiatives.

Review these three methods below. Then, you'll be able to win any argument made about how much Obama added to the national debt.

Method 1: Debt Added Since Obama Took Office

The largest number comes from calculating how much the debt increased during Obama's two terms. When Obama was sworn in on Jan. 20, 2009, the debt was $10.626 trillion. When he left office on Jan. 20, 2017, it was $19.947 trillion. It explains why some would say Obama added $9 trillion to the debt—more than any other president.

Method 2: Obama's Budget Deficits

The second method is to add up all of the budget deficits incurred while Obama was in office. But it's a little misleading to hold any president completely accountable for the deficit incurred during the first year. Most of that deficit rightfully belongs to the previous president since he created the federal budget.

President George Bush's last budget, for Fiscal Year (FY) 2009, created a deficit of $1.16 trillion. That fiscal year began on Oct. 1, 2008, and continued until Sept. 30, 2009. Although most of that deficit occurred after Obama took office, it was a result of Bush's budget.

Similarly, the first deficit that occurred after President Donald Trump took office was due to Obama's last budget. Here are the deficits by year that can accurately be attributed to Obama.

The deficits from all these budgets total about $6.790 trillion. But, like most presidents, Obama's contribution to the debt was higher. There's a difference between the deficit and the debt by president. All presidents can employ sleight of hand to reduce the appearance of the deficit—they can borrow from federal retirement funds.

For example, the Social Security Trust Fund has run a surplus since 1987. There have been more working people contributing to the fund via payroll taxes than retired people withdrawing benefits from it. This fund invests its surplus in U.S. Treasury notes. The president can reduce the deficit by spending these funds instead of issuing new Treasurys. As a result, Obama added a total of $8.588 trillion to the debt.

Method 3: How Obama's Policies Increased the Debt

© The Balance, 2018

Is it fair to blame any president for events over which they had no control? During Obama's terms, there was less federal income than usual. The recession and the Bush tax cuts reduced tax receipts. At the same time, the cost of Social Security, Medicare, and other mandatory programs continued to increase.

The fairest method is to measure the debt incurred by Obama's specific policies. The Congressional Budget Office (CBO) does this for every program. The CBO found that Obama's largest contribution to the debt was the Obama tax cuts, which were an extension of the Bush tax cuts. They added $858 billion to the debt in 2011 and 2012.

The American Recovery and Reinvestment Act (ARRA) also contributed a large amount, adding about $787 billion between 2009 and 2012. It cut taxes, extended unemployment benefits, and funded job-creating public works projects. Like the tax cuts, the ARRA stimulated the economy after the 2008 financial crisis.

Obama also increased military spending per year. The Patient Protection and Affordable Care Act (also known as Obamacare) also contributed to the debt, but not until 2014 when the health insurance exchanges opened. It also extended coverage to more low-income people that year. Obamacare's tax increases offset the costs of the program to the tune of $104 billion between 2010 and 2019. Congress and Obama also negotiated the sequestration budget cuts. That cut the deficit by a small percentage. When all of this is added up, Obama and his policies increased the national debt by $983 billion.

The Bottom Line

Depending on the method you use, Obama contributed between $983 billion and $9 trillion to the overall U.S. national debt. While that’s a large amount, it’s worth comparing to the national debt added by every president. That's the best way to understand why the U.S. debt is so big.

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Article Sources

  1. TreasuryDirect. "The Daily History of the Debt Results," Accessed Oct. 1, 2019.

  2. Bureau of the Fiscal Service. "The Government's Financial Position and Condition," Accessed Oct. 1, 2019.

  3. Congressional Budget Office. "Budget and Economic Data, Historical Budget Data, January 2017," Accessed Oct. 1, 2019.

  4. Congressional Budget Office. "Budget and Economic Data, Historical Budget Data, January 2017," Accessed Oct. 1, 2019.

  5. Social Security Administration. "Financial Data For The Social Security Trust Funds," Accessed Oct. 1, 2019.

  6. Library of Congress. "Congressional Record—House, December 26, 2010," Accessed Oct. 2, 2019.

  7. Congressional Budget Office. "Estimated Impact of the American Recovery and Reinvestment Act on Employment and Economic Output from October 2012 Through December 2012," Accessed Oct. 2, 2019.