10 September 1999
Our current howler (part II): Surplus chatter
Synopsis: Dick Armey avoided the basics on Meet the Press. A guest host showed no sign of knowing.
Commentary by Jeffrey Birnbaum, Brit Hume, Juan Williams
Special Report with Brit Hume, Fox News Channel, 8/23/99
Commentary by Rep. Dick Armey (R-TX), Stone Phillips
Meet the Press, NBC, 8/29/99
GOP tax cuts would hurt entitlements, Clinton warns
Bill Sammon and John Godfrey, The Washington Times, 8/26/99
Clinton takes tax offensive
George Hager, The Washington Post, 8/26/99
Clinton: Big tax cut would gut programs
William Welch and Richard Benedetto, USA Today, 8/26/99
Why can't big scribes explain basic concepts? Maybe it's because
they spend so much time gossiping. Late in August, President Clinton
publicly described how he had fallen in love with Mrs. Clinton
in law school. In response, on the August 23 Special Report,
Brit Hume had a little fun up his sleeve:
HUME: The picture he paints of Mrs. Clinton is of a sort of
a femme fatale. Now [posting a picture] that's about
what she looked like then and one can't help but wonder about
Apparently, the old photo didn't look enough like Pamela Lee, so
the boys enjoyed a good hearty laugh. After several minutes of
gossip about how the Clintons get along, they returned to that
JUAN WILLIAMS: The problem is that nobody can believe, one,
that she was this beautiful woman in collegeanyone who's seen
the picturesand, two, who can believe that she didn't know that
this guy was a skirt-chaser all along?
JEFFREY BIRNBAUM: Well, I should point out, about the love-in-college
part, that love is blind [laughter]. But that also
HUME: Well, he never said she was beautiful. He said she was
compelling looking. And that she may well have been.
When major journalists are willing to engage in conversations
like this, is it really surprising when they can't explain the
simplest concepts in their areas of specialty? (See THE DAILY
HOWLER, 9/9/99, for our review of Birnbaum-on-lockbox.)
But inability to explain simple fiscal matters is a long-established
trait of the press corps. In 1995 and 1996, for two solid years,
the press corps completely failed to clarify simple concepts in
the seminal Medicare discourse (see THE DAILY HOWLER, 8/18/99,
8/19/99, and 8/20/99 with links to position papers). And current
discussions of tax cut proposals now swim in a similar stew. Case
in point: on August 29, Rep. Dick Armey appeared on NBC's Meet
the Press. Guesting for Tim Russert, Stone Phillips quoted
a letter President Clinton had sent to Dennis Hastert on August
PHILLIPS: The president took a little time off from his vacation
this week to send a letter to House leader Hastert. Let me read
a part of it to you. Quote: [Text as posted on screen]
"The [Republican] tax bill would spend 100 percent of the
non-Social Security surplus, creating an impossible budgeting
problem. It would require nearly 50 percent cuts in essential
government functions, everything from education to air traffic
controllers to the Federal Bureau of Investigation...If your tax
cuts became law, it would leave America permanently in debt."
Your response? [All edits by Phillips]
For the record, there were parts of what Phillips quoted that
didn't seem to make sense on face. For example, even if the GOP
tax cuts did return the entire non-SS surplus, why should
that force any spending cuts at all? A "surplus"
is money over and above what will be spent; if a surplus
were returned in the form of tax cuts, that wouldn't seem to affect
spending at all. Surely Phillips was ready to deal with this matter.
Indeed, Armey feigned total bewilderment:
REP. ARMEY: ...We have $1 trillion of non-Social Security surpluses
outside of the income taxes. The president wants to spend it.
We take 792 billion of that and we say, "Give it back in
the form of a tax cut"...The president and many others on the
other side want to spend the money. The fact is there will not
be the reduction in spending that he's talking about. I don't
know where he gets that kind of projection.
It was interesting that Armey didn't know the source of Clinton's
projection, because virtually every major paper had explained
the matter on Thursday, August 26. As it turns out, the White
House had written the letter to Hastert, and released a position
paper as well. Here's how the Washington Times explained the projection
on spending cuts:
SAMMON AND GODFREY: The program cuts would be required under
budget laws created during Congress' decades-long battle to reduce
the federal deficit. The laws require that any tax cuts be matched
either with a tax increase or cuts to entitlement programs. Failing
to meet that requirement would trigger an across-the-board cut
to most federal programs.
The Washington Post 'splained it, too:
HAGER: The White House report that links the GOP tax cuts to
Medicare cuts is the byproduct of budget rules written when the
federal government was running massive budget deficits. Those
rules, which are still in place despite the advent of budget surpluses,
require that any tax cuts be "paid for" by raising other
taxes or cutting spending.
Armey's protestations aside, it was perfectly obvious where
the White House "got that kind of projection." But Phillips
jumped ahead to a different question. He asked if Armey would
be willing to meet Clinton in the middle, at a $500 billion cut.
Armey's answer raised the basic question at the heart of the tax
REP. ARMEY: ...[I]f he comes back and says, "Look, Dick Armey.
I will give you a dollar's worth of tax reduction for a dollar's
worth of spending increase, I'm not going to talk about that.
The president committed to holding to the spending limits he signed
back in '97. The House and the Senate committed to it. Both the
House and the Senate Republicans and Democrats budgets kept those
spending limits. And the president now is coming back and saying,
"I want to break those spending limits I agreed to, I signed
In raising the matter of the "spending caps" that
were part of the 1997 balanced budget agreement, Armey raised
the basic matter at the heart of the current debate. All through
the summer, one analyst after another had pointed out that these
spending caps were completely unrealisticthat no one believed
that either party would stick to the caps in future budgets (see
THE DAILY HOWLER, 8/17/99 and 8/20/99). And indeed, the spending
caps, if adhered to, would require substantial cuts in
future government services. As we have seen, analysts had repeatedly
argued that, if government spending merely increased at the rate
of inflation, virtually all of the $996 billion ten-year "surplus"
would be gone. The GOP tax cut depended entirely on adherence
to serious adjustments in future spendingadjustments which a
stream of analysts repeatedly said no Congress would be willing
This was plainly the time for the host to ask Armey the obvious,
basic question. Was he prepared to accept the reductions in future
services needed to "pay for" his tax cut? This is the
single key, basic question on which this entire discussion turns.
It is the issue which politicians of each party should be asked
to answer, whenever they talk about returning the "projected
surplus" in tax cuts, or spending it on government programs.
But Phillips didn't ask the basic, key question; again, he
stepped over the problem with Armey's reply, to ask about Alan
Greenspan ("Why not take his advice?"). In so doing,
Phillips reflected the tendency of the media, in the past month,
to drop all mention of the problem with the projected surplus,
a tendency we unerringly predicted (see THE DAILY HOWLER, 8/27/99).
The bogus provenance of the projected surplus has totally dropped
from sight. Read, for example, this formulation as USA Today discussed
WELCH AND BENEDETTO: 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 strength Social Security. They say the
non-Social Security surplus should largely be returned to
But that non-SS surplus is entirely based on the unrealistic
spending caps. Welch had explained that in detail on July 23,
but by now it has completely disappeared from his own discussions
of the proposed tax cuts.
It is impossible to have a basic discussion of current tax
cut proposals without discussing the spending capswithout informing
the public that the "projected surplus" is based on
these unrealistic spending levels. The matter is absolutely fundamental.
Yet, when Armey himself raised the caps, his Meet the Press
host moved on. Moments later, Armey said the projected non-SS
surplus was "an overcharge against the American people."
That, of course, is only true if the American people will accept
future cuts. Are they prepared to accept such cuts in services?
Again, Phillips failed to ask.
In 1995 and 1996, for two solid years, the press corps failed
to ask a basic questioncould the GOP maintain existing Medicare
services at the future spending levels they had proposed. We never
learned how they would have answered the question, because the
questioncompletely basicwas never asked. Now, the press corps
is up to its sad old habits, failing to ask basic questions again.
This press corps shows phenomenal skill when it comes to gossip
and mocking old photos. But when it comes to unraveling
elementary concepts, the joke is on us, my dear friends.
Sunday, muddy Sunday: The tax cut proposal will likely
be discussed on Sunday shows. See if anyone mentions the future
spending cuts on which the whole project is based. Democratic
spokesmen should be asked the same question. They propose a smaller
tax cut, and some new spending, based on the bogus projected surplus.
Coming Monday: Fiscal omerta! No matter how worthless
an argument is, this press corps will never correct it.