While most U.S. presidents over the past 75 years have run budget deficits for many if not all of their years in office, there are four whose deficits have far exceeded those of their peers. The four presidents who have run the largest deficits through 2017 are Barack Obama, George W. Bush, Ronald Reagan and George H.W. Bush.
Determining Who Ran the Largest Deficit
There are two ways to look at the U.S. budget deficit when determining which president has run the largest deficit. The first is to look at each president's term or terms in office, total the deficits run over the course of their four or eight years, and base your conclusions on those numbers. According to this method, Barack Obama's budget deficit was $6.69 trillion over his eight years, making him the president with the largest budget deficit. George W. Bush is second, with a deficit of $3.29 trillion over his eight years. Ronald Reagan is third at $1.412 trillion deficit in eight years, and George H.W. Bush comes in fourth with a $1.03 trillion deficit in his single term.
Deficit Responsibility Does Not Solely Belong to the President
While totaling the deficit over each president's term to see who has run the largest deficit seems to be common sense on the surface, the responsibility for the budget is not so black and white. For one thing, Congress has to vote to approve the U.S. budget and the allocation of government spending for things such as economic stimulus packages or affordable health care, which add to the deficit. Mandatory spending is automatically built into the budget for national programs such as Social Security, welfare and Medicare. These programs are acts of Congress and would require further acts to amend or eliminate them. The federal fiscal year runs from October 1 to September 30, so for the first nine months a new president is in office, he is working with the budget laid down by his predecessor.
The laws governing the federal fiscal year are the reason a second way to look at budget deficits is on a year-by-year basis. In years when a new president is elected, there are two plans at work: the old plan laid out by the previous administration and the new plan brought in by the new president. The single-largest budget deficit in U.S. history happened during such a year; the 2009 fiscal year clocked a $1.412 trillion deficit. For the first third of that year, President George W. Bush was in office, while for the last eight months, Barack Obama took the White House.
In October 2008, after Bush's budget was approved for the 2009 fiscal year, the Dow dropped dramatically, recording three of its 10 worst days in a single month. After Obama took office, fears of a looming recession encouraged Congress to pass an economic stimulus package, immediately adding a further $253 billion to Bush's already-approved budget, and making the $1.412 trillion deficit the work of two administrations.
(For related reading, see "Should Investors Worry About the Budget Deficit?")