27 August 1999
Our current howler: Fade to in-the-black
Synopsis: In July, William Welch explained that the surplus was bogus. As of yesterday, it seems hes forgotten.
Sharp tax cut based on shaky numbers
William Welch, USA Today, 7/29/99
Clinton: Big tax cut would gut programs
William Welch and Richard Benedetto, USA Today, 8/26/99
Four weeks ago, William Welch won our hearts, here at DAILY
HOWLER World Headquarters, with a detailed report in USA Today
on the projected budget surplus. After describing the $792 billion
tax cut passed by the House, and the $300 billion tax cut proposed
by Senate Democrats, Welch, like Calchas addressing Agamemnon
(see postscript), offered us winged words of warning:
WELCH (7/29): But some analysts and law-makers say none of these figures
is realistic because the budget surpluses counted on to finance
tax cuts may prove to be only a mirage.
May prove to be a mirage? Welch offered a detailed analysis
of the problems with the projected non-Social Security surplus:
WELCH (7/29): The surplus projections are based on the assumption
that Congress will stick to tight limits on government spending,
called caps, set by a budget deal in 1997.
And was it likely that Congress would stick to the caps? "Our
experience with the caps...indicates that they are impossible to
meet," said Robert Reischauer, former head of the Congressional
Budget Office. Welch cited current CBO estimates, which made it
sound entirely possible that there would be no future surplus
WELCH (7/29): The CBO acknowledges the surplus picture could look
far different if spending rises even a little. Just letting government
spending rise at the rate of inflation starting next year would
result in a surplus of $247 billion, instead of $996 billion,
over the decade. Allowing for inflation and adding $7 billion
to $20 billion in "emergency" spending each year would
nearly wipe out the surplus.
Indeed, Welch added a further CBO estimateif spending rose
at an annual 4.3% rate, there would be a $422 billion deficit
over the next ten years. Welch didn't quote a single legislator
or budget analyst saying that the projected surplus was likely
But we tried to warn you on Monday, dear readersthis press
corps tends to fall in line with officially-sanctioned stories
(see THE DAILY HOWLER, 8/23/99). And yesterday, an article by
Welch and Richard Benedetto completely failed to mention the groaning
problems on which the projected surplus is based. Welch dutifully
reported President Clinton's stated claims about the effects the
GOP tax cut would have; the tax cut "would force automatic
cutbacks in Medicare, farm price supports and other major programs
if it were allowed to become law," Welch paraphrased Clinton
saying. Welch quoted a letter which Clinton sent Congress, commenting
on the proposed cut:
WELCH (8/26): "It would require nearly 50% cuts in essential
government functions, everything from education to air traffic
control to the Federal Bureau of Investigation," Clinton
said of the tax cut.
But later in his article, with the busy-work done, Welch alluded
to the projections on which this debate is based. And he betrayed
no sign that he'd ever heard that these projections aren't solidly
WELCH (8/26): Clinton has supported a far smaller tax cut of about
$250 billion over 10 years, while reserving most of the rest of
anticipated surpluses to shore up Social Security, Medicare and
other programs, and to pay off some of the nation's $5.6 trillion
Welch writes as if the "anticipated surpluses" were
firmly in placeas if the only thing to be debated is how to dispose
of the funds. In this article, everyone quoted seems to assume
that the surplus is soundly based:
WELCH (8/26): Congressional Republicans contend they are devoting
nearly three-fourths of projected federal budget surpluses over
the next decade, including all that come from excess Social Security
payroll taxes, to pay off national debt and thus indirectly strengthen
Social Security. They say the non-Social Security surplus should
largely be returned to taxpayers.
And indeed, that is what Republicans saybut a month
ago, Welch knew better. A month ago, he knew this "non-Social
Security surplus" was made of thin air. Readers of yesterday's
article didn't hear him say one word about it.
Dear readers: very few readers of yesterday's article understand
what Welch explained in July. Few citizens now being polled on
this proposed tax cut could explain the problems with the surplus
projections. For that reason, no discussion of proposed budget
plans makes any sense whatsoever, unless it mentions the important
facts which Welch wrote about in July.
We told you on Monday that this would beginthat scribes would
bow to established power and tell this tale the way the two parties
like it. Scribes hate contradicting established stories.
Yesterday, Welch's readers were extremely ill-served by
this unfortunate impulse.
Visit our incomparable archives: In the 1995-1996 Medicare
discourse, very basic fiscal matters were misreported for
two solid years. See THE DAILY HOWLER 8/18/99 and 8/19/99. For
links to past position papers, see THE DAILY HOWLER, 8/20/99.
Notes on Calchas: Our internationally-acclaimed Task Force
on Classical Allusions believe Professor Fagles has it just about
right when he renders Calchas' words to Achilles as The Iliad
So he proposed
And down he sat again as Calchas rose among them,
Thestor's son, the clearest by far of all the seers
Who scan the flight of birds
For the armies' good the seer began to speak:
"Achilles, dear to Zeus,
you order me to explain Apollo's anger,
the distant deadly Archer? I will tell it all.
But strike a pact with me, swear you will defend me
With all your heart, with words and strength of hand.
For there is a man I will enrageI see it now
A powerful man who lords it over all the Argives,
One the Achaeans must obey. A mighty king,
Raging against an inferior, is too strong"
Calchas referred to Agamemnon, lord of men. But fear of offending
the mighty with truth remains a factor in human affairs to this