Caveat lector

Our current howler: Fade to in-the-black

Synopsis: In July, William Welch explained that the surplus was bogus. As of yesterday, it seems he’s 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 at all:

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 estimate—if 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 to occur.

But we tried to warn you on Monday, dear readers—this 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 founded:

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 debt.

Welch writes as if the "anticipated surpluses" were firmly in place—as 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 say—but 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 begin—that 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 opens:

PROFESSOR FAGLES:
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 enrage—I 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 day.