THURSDAY, JANUARY 9, 2003
WHILE PUNDITS SLEPT: If passed, will the Bush tax cuts lead to big deficits? On Tuesday evenings Hannity & Colmes, Clinton budget ace Gene Sperling was worried about expanding red ink. Sean Hannity said he was goofy:
HANNITY: You dont get it, Gene. You still dont get it.
Could somebody go get Bruce Bartlett? As we saw in Mondays HOWLER, Bartlettthe respected conservative economistnoted the obvious in last weeks Wash Times: It is absurd to think that lower tax rates produce higher federal revenues (see THE DAILY HOWLER, 1/6/03; for text of Bartletts column, click here). Nobody thinks that, Bartlett said. But there was Hannity, dreaming sweet dreams: When you cut taxes, you double revenues, Sean said. As weve noted in Mondays HOWLER, talk-show cons have told this dumb tale to The Cattle for years upon years.
SPERLING: And Sean, what you dont remember is that when government is paying debt
HANNITY: You dont understand, Gene. When you cut taxes, Gene Sperling, you double revenues, you increase revenues, you spur economic growth. You think that were going to have less revenues unless the government picks peoples pockets. Thats the problem in your thought.
And why does Hannity dream such lotus-land dreams? Why do the ditto-heads hear this dumb tale? Because the mainstream press corps has allowed it to happen. For year after year, Rush and Sean have peddled this tripecomplete nonsense, Bartlett saidand the mainstream press has stood idly by, too docile to offer Word One. Proudly possessed by Millionaire Pundit Values, they care about their neighbors McMansions and they care about their party invitesand they really dont give a flying fig about your public discourse. You live in a world with a crackpot discourse because theyve stood idly by.
Theres nothing so stupid that Sean wont say itand your insider pundits will never correct him. For many years, your pundit corps has been too frightenedand too uncaringto take on the power of the Talk-Show Right. As Bill Clinton correctly said: They have an increasingly right-wing and bellicose conservative press. And we have an increasingly docile establishment press. Results? Dittoheads keep hearing Seans nonsense. Why do they think that Seans nonsense is true? Simple. Your docile pundit corps doesnt care.
WHAT EVER HAPPENED TO BALANCED BUDGETS: Remember when pundits used to push balanced budgets? In Campaign 2000, every candidate had to say he was spending the surplusand not a cent more. But now, Dear Leader is deep in red inkand the pundit corps dont hardly notice. Wed say that your pundit corps bends in the breeze, but that would probably be too kind. In fact, every time a breeze starts to blow, they break at the stem and float off.
What ever happened to concern about deficits? Pundits were hot on the topic in Campaign 2K, and theyre barely aware of it now. On Tuesday night, Campbell Brown did the Bush plan for Brokaw. Heres a chunk of what she said:
BROWN: So who would benefit most [from Bushs proposals]? Elderly stockholders. The president wants to end taxes on corporate dividends, and half of all that income goes to seniors. Every taxpayer would get some relief with the president calling for the early phasing in of his 2001 tax cut. Most savings would go to the richest Americans who pay more in taxes. Families would gain with a reduction in the marriage penalty and an increase in the per-child tax credit from $600 to $1,000 this year, and the unemployed. The president wants to set up special accounts of up to $3,000 for the jobless to use for retraining or child care.
That was the entire discussion of deficits. All over the media, the sizzling issue was hard to find in discussion of the new Bush proposal.
PRESIDENT BUSH (on tape): As we encourage long-term growth, we will not forget the men and women who are struggling today.
BROWN: But some may keep struggling under the plan, like the working poor who dont make enough to pay taxes. Cash-poor state governments. The dividend tax cut will cost them money. Then theres the growing deficit. Many economists warn deficits hurt the economy long term.
How much do deficits matter? That is a matter of judgment. But your liberal press corps was looking away as a new budget plan sought to drive up red ink. Three years ago, they were hot on the topic. Faddists, they no longer bother.
THE DEFICIT ACCORDING TO BRIAN: Is it true, what Hannity said? When you cut taxes, do revenues double? On Tuesday night, Brian Williams
welcomed White House communications director Dan Bartlett to his nightly CNBC show. Bartletts song was something like Seans, and Brianbig surprisedidnt notice.
Brian introduced Bartlett (Dan, not Bruce), with us from the North Lawn. He asked if we can afford a war in Iraqand perhaps some action in North Koreadespite the new proposed tax cuts. Heres what Dan Bartlett said:
DAN BARTLETT: Well, good evening, Brian. I think its first important to say that this is the right package for a recovering economy. We want to add momentum to that economy thats under recovery right now. And the way do you that is let more Americans keep more of their own money. In this package that President Bush outlined today, 2.1 million more jobs will be created over the next three years; ninety-four million taxpayers will get about $1100 in tax relief this year alone. Thats immediate relief that also has long-term benefits and good tax policy. Thats exactly what this economy needs.
First, lets note that Bartlett misspoke; it is false to say that 94 million taxpayers will get $1100 this year. They will get an average of $1100a vastly different proposition. Needless to say, Brian didnt challenge this point. But then Bartlett mentioned the deficit:
DAN BARTLETT (continuing directly): Now, we have a situation here where its important that priorities are set in Washington so that we can meet all our needs and continue to pay down on this deficit. And the way do you that is get this economy growing again. President Bush will outline a budget the first week of February that will clearly set our priorities. Thats to win this war; its to protect the homeland; its to continue to grow this economy, while we meet our needs. The way you do that is for the United States Congress to continue to be disciplined in its spending habits.
What exactly did Dan Bartlett mean? According to the budget statements of the White House itself, the proposals announced by Bush this week will cost the government $674 billion in revenue over the next ten years. According to the White House itself, the federal government will have less revenue because of these proposals, not more. And will we continue to pay down the deficit? As Bartlett knowsas he knows full wellwe arent paying down on this deficit now!
Williams, of course, didnt challenge. He didnt ask how well pay down the deficit if we institute plans that reduce federal revenues. And, of course, he didnt say that we arent reducing the deficit now. Bartlett offered a pleasing picture. Too bad it seemed to be a sweet dreamand too bad Handsome Brian didnt notice.
In this mornings New York Times, we learn what the White House is actually claiming (when forced to say something coherent, that is). Edmund Andrews describes a document from the White House Council of Economic Advisers. In it, the administrations sunniest view of the costs of this plan is discussed:
ANDREWS: The estimate also includes an extremely optimistic projection of the plans total cost. Using a supply-side analysis, which assumes that tax cuts will partly pay for themselves by promoting faster growth, White House officials predicted the actual revenue loss to the federal Treasury would be less than half the size of the tax cut between now and 2007.
In public, the White House has said the economic plan would cost the Treasury about $674 billion over 10 years. But under a supply-side scenario, the cost through 2007 would drop from $359 billion to $166 billion. The discussion of costs is significant because some lawmakers are concerned about how much the tax cuts will add to the federal deficit.
Note the key word partly. Even the White House doesnt claim that these tax cuts will pay for themselves (let alone double revenues). The White House claims that the actual cost to the treasurygiven economic growthwill be about half as large as the official price tag, which is generated by static accounting. But lets make sure that we know what that means. Even the White House doesnt claim that the new plan will help pay down the deficit. Even the White House says that this plan will produce less revenue, not more.
In short, Dan Bartlett seems to have told a sweet taleand the inept Williams let him. Bartlett, speaking for the White House, assures viewers that well somehow continue to pay down the deficit. Readers, we arent paying down the deficit nowand if the CEA is to be believed, these new proposals will delay the effort. Meanwhile, Hannity peddles his lotus-land dreamssweet dreams The Herd loves to hear.
None of this is super-hardbut citizens deserve to have these tales explored. Lotus-land dreams are being peddled aroundand your pundit corps dont seem to care.
SOMEBODY ELSE WAS TELLING SWEET STORIES: Actually, somebody else was telling sweet stories. Heres a part of the presidents speech:
BUSH: Our nation has seen two years of serious and steady challenges. The recession and the decline in the stock market slowed earnings and cut into tax revenues and created a budget deficit. And in this time of war, I can assure you, this government is spending what is necessary to win the war.
Applause is nicebut so is clarity. Will Bushs proposals bring higher revenues? President Bush told a pleasing tale. Will the press dare to ask what he meant?
But the Congress must also understand this: the American people deserve and expect spending discipline in Washington, D.C.
With spending discipline and with pro-growth policies, we will expand the economy and help bring down this deficit.
This growth and jobs package is essential in the short run. Its an immediate boost to the economy. And these proposals will help stimulate investment and put more people back to work, is what we want to have happen.
Theyre essential for the long run as well to lay the groundwork for future growth and future prosperity. That growth will bring the added benefit of higher revenues for the government, revenues that will keep tax rates low while fulfilling key obligations and protecting programs such as Medicare and Social Security.
DANAS POINT: At the Post, Dana Milbank flagged Bushs comments:
MILBANK (1/8/03): Bush, in a speech with flourishes of populist rhetoric, used the language of supply-side economists, who argued in the 1980s that tax cuts would actually increase government receipts. Bush said his proposals lay the groundwork for future growth and future prosperity. That growth will bring the added benefit of higher revenues for the governmentrevenues that will keep tax rates low, while fulfilling key obligations.
What actual claims is the White House making? Inquiring minds want to know.