20 August 1999
Our current howler (part IV): The press corps new surplus
Synopsis: The press corps knows the surplus aint real. But often, they cant bear to say it.
The Trillion-Dollar Problem
Editorial, The New York Times, 7/12/99
Editorial, The New Republic, 7/19,26/99
We've often thought, in the past few weeks, of that mythical
emperor with the spanking new clothes, whose admiring subjects
couldn't bring themselves to see that he was parading down the
street dead-dog naked. The press corps seems to know, to a man,
that the projected future surpluses aren't real. But so strong
is the pull of those CBO diktats, they often can't make themselves
Take the July 12 New York Times editorial announcing
that the surplus was bogus. In paragraph three, the Times lets
us see itthey know that the surplus ain't real:
THE NEW YORK TIMES (paragraph 3): If Americans want to use
that money for tax cuts, they need to know the consequences. The
surplus rests on the assumption that Congress and the White House
will carry out previously targeted spending cuts. No one thinks
that will happen.
And if that's so, the Times understandsas other scribes dothat
the projected federal surplus is "illusory" (Washington
Post; see THE DAILY HOWLER, 8/17/99). The surplus exists because
we're pretending we'll enact large spending cuts, when everyone
on earth knows we won't.
But in the very same editorial, up in paragraph one, the Times
couldn't quite bear to say it. This is what was a harried reader
would have seen in paragraph one:
THE NEW YORK TIMES (1): Only a few weeks ago, the idea of Congress
and the President wrangling over a trillion-dollar budget surplus
would have provoked disbelief. But it turns out that the new era
of surpluses is just as contentious as the old era of deficits.
As Congress returns to work today, House Republicans are preparing
a tax cut so large it would use up virtually all of the surplus
for 10 years, leaving no money to make Medicare solvent or to
avoid deeper domestic cuts.
Say what? If the Times believes its own paragraph three, then
it believes there are no actual surpluses. But in paragraph one,
where eyes first meet the page, it speaks of a "new era of
surpluses," and complains that the Republican tax cut proposal
would "use up virtually all of the surplus." In paragraph
four, things get better. Directly after discarding the assumption
on which the surplus projections rest, the Times again goes its
merry way, chatting about what to do with the surplus which it
just said doesn't exist:
THE NEW YORK TIMES (4): A more realistic approach would set
aside a substantial part of the surplus to sustain current domestic
spending and perhaps expand it in certain areas. President Clinton
wants to set aside another chunk for Medicare...[I]t is not unrealistic
to set money aside for the job out of the surplus.
The Times goes right back to discussing the surplus, as if
its own paragraph three never occurred.
No, Virginia, there is no future surplusunless we cut domestic
spending in ways that no one thinks we'll do. That was the point
made by the Washington Post in its aggressive July 5 editorial.
By any rational assessment, it's a crucial point, with both the
president and the Congress pretending different. If it's true
that our budget projections are built on thin air, then the public
needs to be told that factand the fact can't just be mentioned
once, and then thrown away and abandoned.
But the New York Times is not alone in its fickle affair with
this fact. Take a look at the New Republic's coverage of
the alleged surplus. In a July 19/26 editorial, TNR said
this on the surplus:
THE NEW REPUBLIC: There are, of course, good reasons to be
skeptical about the numbers...[T]he surplus figures are a bit misleading.
They include liabilitiesthat is, IOUsin the Social Security
trust fund and assume a willingness in Congress to abide by spending
restraints enacted by the 1997 budget agreement. Factor in the
liabilities and allow for Congress to break the rules, and the
surplus starts to diminish.
TNR seems to understand the problems with the projections.
But two issues later, the journal's lead story was billboarded
on the cover as, "American PieWhat to do with a $2.9 trillion
surplus?" The issue features three different articles: "Spend
It," "Save It," and "Give It Back" (penned
by Barry Bluestone, Alan Blinder, and Amity Shlaes, respectively).
The journal had gone right back to those surplus projections which
it said we had "good reasons" to doubt.
Different publications have expressed different views about
the surplus projections. But even those most scathing in assessing
the surplus have sometimes later chosen to act as if the projections
were perfectly credible. Take the Post. It took the lead, in its
July 5 editorial, in describing the "illusory" nature
of the surplus. But on July 31, the paper reported that the Senate
had passed a $792 billion tax cut "to provide broad-based
tax relief to many Americans." Contrasting the Senate bill's
provisions with an earlier House bill, Eric Pianin and Dan Morgan
PIANIN AND MORGAN: Both the Senate and House versions use future
surpluses to provide $792 billion of tax benefits over 10 years,
but the two plans differ significantly in their details.
The paper is back to writing about the surpluses as if they
were resulted from legitimate analysis. Not a word is offered
to alert a reader to the shaky provenance of these substantial
new tax cuts.
By the time this article appeared in the Post, any number of
writers, for major publications, had echoed the Post's July 5
editorial. Again and again, writers had shown that the projected
surplus derives from false assumptions. Do you see why our thoughts
have turned, in recent weeks, to those cheerful subjects of the
buck-naked king? Who shouted out praise for the emperor's clothes,
despite what was right there before them?
In describing the problems with the budget projections, the
press corps this summer has done the job it failed to do in the
Medicare discourse. The scam it reported is profound and serious.
It can't be mentioned once, then discarded.
The ever-new Republic: If you don't like the
New Republic, just wait a while. Two weeks after the "What
to do with the $2.9 trillion surplus" issue, TNR flipped
again. In the August 23 TNR, Jonathan Chait penned a detailed
column, "Pie in the Sky," explaining (again!) the budget
blarney. "The on-budget surplus is almost entirely an illusion,
the product of cooked books and wishful thinking," he said.
TNR's editors thought so too. Here's what they
said in an editorial:
THE NEW REPUBLIC: As Jonathan Chait notes elsewhere in these
pages, that $2.9 trillion surplus everyone's talking about is
premised on the somewhat dubious assumption that Congress will
abide by the discretionary spending caps instituted as part of
the 1997 Balanced Budget Act. And, if Congress doesn't abide by
those caps, then the surplus disappearsand so does the Congressional
Republicans' justification for their regressive $792 billion tax
That surplus that "everyone's talking about?" These
same editors put it on TNR's cover two weeks before, asking
three writers what to do with it!
More on MedicareDO NOT MISS! We offer detailed work
on the 1995-96 Medicare discourse, and a visit to our companion
site, the incomparable Socrates Reads! See "More HOWLER History,"