Caveat lector

FREE MONEY! Hannity said that less was more. But then again, so did the president:

THURSDAY, JANUARY 9, 2003

WHILE PUNDITS SLEPT: If passed, will the Bush tax cuts lead to big deficits? On Tuesday evening’s Hannity & Colmes, Clinton budget ace Gene Sperling was worried about expanding red ink. Sean Hannity said he was goofy:

HANNITY: You don’t get it, Gene. You still don’t get it.

SPERLING: And Sean, what you don’t remember is that when government is paying debt—

HANNITY: You don’t understand, Gene. When you cut taxes, Gene Sperling, you double revenues, you increase revenues, you spur economic growth. You think that we’re going to have less revenues unless the government picks people’s pockets. That’s the problem in your thought.

Could somebody go get Bruce Bartlett? As we saw in Monday’s HOWLER, Bartlett—the respected conservative economist—noted the obvious in last week’s 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 Bartlett’s 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 we’ve noted in Monday’s HOWLER, talk-show cons have told this dumb tale to The Cattle for years upon years.

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 tripe—“complete nonsense,” Bartlett said—and 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 invites—and they really don’t give a flying fig about your public discourse. You live in a world with a crackpot discourse because they’ve stood idly by.

There’s nothing so stupid that Sean won’t say it—and your insider pundits will never correct him. For many years, your pundit corps has been too frightened—and too uncaring—to 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 Sean’s “nonsense.” Why do they think that Sean’s nonsense is true? Simple. Your docile pundit corps doesn’t 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 surplus—and not a cent more. But now, Dear Leader is deep in red ink—and the pundit corps don’t hardly notice. We’d 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 they’re barely aware of it now. On Tuesday night, Campbell Brown did the Bush plan for Brokaw. Here’s a chunk of what she said:

BROWN: So who would benefit most [from Bush’s 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.

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 don’t make enough to pay taxes. Cash-poor state governments. The dividend tax cut will cost them money. Then there’s the growing deficit. Many economists warn deficits hurt the economy long term.

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.

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. Bartlett’s song was something like Sean’s, and Brian—big surprise—didn’t notice.

Brian introduced Bartlett (Dan, not Bruce), “with us from the North Lawn.” He asked if we can afford a war in Iraq—and perhaps some action in North Korea—despite the new proposed tax cuts. Here’s what Dan Bartlett said:

DAN BARTLETT: Well, good evening, Brian. I think it’s first important to say that this is the right package for a recovering economy. We want to add momentum to that economy that’s 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. That’s immediate relief that also has long-term benefits and good tax policy. That’s exactly what this economy needs.

First, let’s note that Bartlett misspoke; it is false to say that 94 million taxpayers will get $1100 this year. They will get an average of $1100—a vastly different proposition. Needless to say, Brian didn’t challenge this point. But then Bartlett mentioned the deficit:

DAN BARTLETT (continuing directly): Now, we have a situation here where it’s 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. That’s to win this war; it’s to protect the homeland; it’s 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 knows—as he knows full well—we aren’t “paying down on this deficit” now!

Williams, of course, didn’t challenge. He didn’t ask how we’ll pay down the deficit if we institute plans that reduce federal revenues. And, of course, he didn’t say that we aren’t reducing the deficit now. Bartlett offered a pleasing picture. Too bad it seemed to be a sweet dream—and too bad Handsome Brian didn’t notice.

In this morning’s 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 administration’s sunniest view of the costs of this plan is discussed:

ANDREWS: The estimate also includes an extremely optimistic projection of the plan’s 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 doesn’t claim that these tax cuts will pay for themselves (let alone “double revenues”). The White House claims that the actual cost to the treasury—given economic growth—will be about half as large as the official price tag, which is generated by “static accounting.” But let’s make sure that we know what that means. Even the White House doesn’t 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 tale—and the inept Williams let him. Bartlett, speaking for the White House, assures viewers that we’ll somehow “continue to pay down the deficit.” Readers, we aren’t paying down the deficit now—and if the CEA is to be believed, these new proposals will delay the effort. Meanwhile, Hannity peddles his lotus-land dreams—sweet dreams The Herd loves to hear.

None of this is super-hard—but citizens deserve to have these tales explored. Lotus-land dreams are being peddled around—and your pundit corps don’t seem to care.

SOMEBODY ELSE WAS TELLING SWEET STORIES: Actually, somebody else was telling sweet stories. Here’s a part of the president’s 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)

But the Congress must also understand this: the American people deserve and expect spending discipline in Washington, D.C.

(APPLAUSE)

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. It’s 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.

They’re 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.

Applause is nice—but so is clarity. Will Bush’s proposals bring “higher revenues?” President Bush told a pleasing tale. Will the press dare to ask what he meant?

DANA’S POINT: At the Post, Dana Milbank flagged Bush’s 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 government—revenues that will keep tax rates low, while fulfilling key obligations.”

What actual claims is the White House making? Inquiring minds want to know.