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9 March 2001

Our current howler: Son of lunch meat

Synopsis: O’Neill was hoping to fool more reporters. David Gregory was soon lunch meat too.

David Rosenbaum, The New York Times, 3/9/01

Treasury's Tax Cut Data Can Cut 2 Ways
Glenn Kessler, The Washington Post, 3/9/01

Commentary by David Gregory
Nightly News, NBC, 3/8/01

Repressing statistics doesn't serve the public
Max Castro, The Miami Herald, 3/6/01

Antiquity knew how to handle it. A familiar image recurs throughout Homer—the image of the gods on Olympus laughing at human folly. Surely, the gods were chuckling when they read this paragraph in this morning's New York Times:

ROSENBAUM: The Treasury Department today released its first estimates of how Americans at different income levels would benefit from the overall Bush tax cut. The calculation showed that those with incomes of more than $200,000 a year, less than 5 percent of taxpayers, would receive 25.4 percent of the tax reductions and that those with incomes under $50,000, a majority of taxpayers, would receive 23.6 percent. But the Treasury's figures did not include Mr. Bush's proposal for repeal of the estate tax, a tax that is levied only on estates of more than $675,000.

In sentence one, we're told that Treasury released a study of the "overall" tax cut. In sentence three—right in the same paragraph!—we're told that the study did not include the estate tax (which is roughly 20 percent of the Bush cut). How in the world do those ideas go together? Homer's gods would simply have laughed. They, of course, all lived on fixed incomes, and had no need to worry about public discourse conducted in such an odd way.

In fairness, Rosenbaum goes on, in the next paragraph, to give the numbers from Citizens for Tax Justice; those numbers did include the estate tax. But to understand what's involved in Treasury's latest dissembling, you must read Glenn Kessler in today's Washington Post. The Post's "numbers guy" was back on his game, listing the oddities in yesterday's hand-out. According to Kessler, Treasury departed from its normal procedures in at least four ways:

1) The report "did not give the results in so-called quintiles—dividing taxpayers into five broad economic groups—but instead used unequal ranges of income."
2) The report "did not calculate the tax cuts received by the top 1 percent, which has also been standard Treasury practice."
3) As Rosenbaum noted, the report "did not include the effect of Bush's $300 billion plan to repeal estate taxes."
4) The report omitted a table "that generally is included in Treasury distributional reports," namely a table showing "percentage change in after-tax income."

Be sure to read Kessler's full report. You know what to do. Just click here.

Why did Treasury change its procedures? Simple—to produce a set of unfamiliar statistics which reporters won't know how to interpret. (We don't normally guess about motive. But Paul O'Neill's dissembling has been so extreme that we too are dropping our normal procedures.) And how effective has the effort already been? Let's visit David Gregory on last night's NBC Nightly News. Later on, the taped report also ran on The News with Brian Williams:

GREGORY: It was no accident that today the White House chose to release data officials say prove the tax cut isn't just a pay-off to the rich. According to the Treasury Department, 38 percent of the savings goes to individuals making $30-40 thousand a year, while just 9 percent goes to those making more than $200,000.

As Gregory spoke, a graphic appeared on the screen. This is what it said:

38 percent $30,000-$40,000 per year
9 percent $200,000 per year

Again—that's the "information" which NBC sent all over the nation.

Our question: Does David Gregory have any idea about the shape of Bush's tax cut? Has he read any newspaper in the past several years? Ever since Bush proposed his plan in 1999, critics have charged that the top one percent would get around 40 percent of its benefits. And the top one percent includes people making around $370,000 a year and more. But last night, Gregory said that the White House was claiming that only nine percent of the benefits would go to a much larger class—those making over $200,000. (According to Rosenbaum, this group comprises the top four percent.) That's right—according to Gregory, the White House was saying that this much larger group was getting only nine percent of the tax plan's benefits!

Could anyone with an ounce of info think that would make any sense? In fact, the Treasury report makes no such claim. As is perfectly clear in this morning's Times, the Treasury study claims that Gregory's Group gets 25.4 percent of the benefits. That, remember, does not include their massive gains from the estate tax repeal.

Where did Gregory career off the track? According to a table in today's Times, Treasury claims that earners making over $200,000 would see their tax bills reduced by nine percent (under the parts of the plan which the study covers). That, we presume, is where Gregory got "9 percent" lodged in his head. But somehow, the scribe got a little confused, and reported a "fact" which made no sense on earth. The notion that this group would get 9 percent of the tax plan's benefits could only occur to a fiscal illiterate. But on NBC, they stepped up to the plate, and they broadcast this "fact" to the nation.

Paul O'Neill is clearly becoming the Hannibal Lecter of Washington. On Sunday, he ate Tim Russert for lunch. On Thursday, he released more bollixed-up figures. He was on the prowl for reporters to fool. Hay-yo! David Gregory was soon lunch meat too.

Visit our incomparable archives: On Sunday, O'Neill ate Russert for lunch. See "Lunch meat," 3/8/01.


The occasional update (3/9/01)

Disinformation moves quickly: How does bogus data get spread? Last Thursday, the White House began pushing an absurdly misleading report, which seemed to claim that the top one percent got 22.3 percent of the tax cut's benefits (see THE DAILY HOWLER, 3/5/01). Alas! The study didn't count the estate tax repeal, and it didn't count the second five years of the income tax cuts (when upper-income earners gain disproportionately). But various papers ran as fast as they could to type up this new, silly, misleading figure. In the Washington Post, you had to read all the way down to paragraph 9 to find out what the trick was this time.

But bogus info spreads like wildfire, which is of course why it's invented. Consider Max Castro's March 6 column in the Miami Herald. The headline? "Repressing statistics doesn't serve the public." Castro lambasted the Treasury Department for refusing to publish distributional tables on the tax cut. Here's what he said about Paul O'Neill, whose fumbling and bumbling has now allowed him to eat Russert and Gregory for lunch:

CASTRO: Coming from a unit of the federal government that lives and dies by statistics, Treasury Secretary Paul H. O'Neill's excuse for not publishing the distribution table—that it would only produce a "nonsense set of statistics"—is as bogus as a three-dollar bill.

But here's what appeared in Castro's own column when he discussed the top one percent:

CASTRO: According to Citizens [for Tax Justice], the top 1 percent of earners would get 43 percent of the benefits of Bush's tax-cut proposals, including income-tax reduction and elimination of the estate tax.

Unofficial estimates from a variety of sources show the 1 percent of taxpayers earning a minimum of $370,000 and an average of $1 million a year would get between 22 and 45 percent of the tax benefit while the 60 percent earning less than $44,000 receive 13 percent of the benefit.

But look what snuck into Castro's own column—that bogus "22 percent" figure! Anyone would think, from reading these paragraphs, that some study somewhere claims to show that the top one percent get 22 percent of the benefits "of Bush's tax cut proposals." But no study ever has claimed that. What happened here? O'Neill put out an absurdly misleading figure, hoping to get it into the bloodstream. Days later, the bogus figure was even floating around in a column which was slamming O'Neill.

The gods on Olympus laugh at this stuff. Humans should be less amused.