Capitol Ideas / The Poisoned Chalice Revisited
Bethell, Tom
S omehow, I had assumed that wily Democrats would resist swallowing the same medicine they encouraged George Bush to take in 1990. The bottle, of course, is misleadingly labeled Deficit Reduction....
...The TV networks have never been known to display budget totals—any more than Time or Newsweek have...
...Since then, I have not seen these figures published in the news columns of any newspaper or magazine...
...But I'm not holding my breath...
...Incidentally, 2000 is the first year in which outlays ($2,055 billion) are expected to exceed the number of the year...
...The difference between what and what...
...On July 9, he actually read some of these budget totals over the air...
...1995: $1,385 billion...
...The New York Times did publish a chart that came close...
...Their repeated message has been a slavish echo of Leon Panetta: Clinton's budget, unlike those of his Republican predecessors, does not involve smoke and mirrors...
...And rather than show such weakness, the Democrats have been hoisting the poisoned chalice to their own lips...
...It does not...
...According to John Cogan, deputy director of OMB in 198889, "The Ways and Means and Finance committees deliberately legislate future spending increases that they have no intention of granting, so that they can later reduce them and say they have 'cut the budget.' " Reporters employed in the Washington bureaus have plenty of space in which to expose this deception, yet they never do...
...As I write, the House-Senate conference is still meeting, so there's a possibility that wisdom will prevail at the last minute...
...C Linton has repeatedly derided "twelve years of Republican trickle-down economics," but he doesn't seem to realize that those twelve years were divided into eight (Reagan) and four (Bush), and that his own administration in retrospect will likely be regarded as having filled out the second (and final) term of the Bush-Clinton years...
...Count me as a member of that cynical public...
...In his economic policy, Clinton isnot so much a New Democrat as an Old Republican...
...We are rarely told...
...The budget is not being reduced...
...in fact I suspect that even many of those on the dole realize that if such people didn't exist, they might have to seek employment...
...But defense spending affects millions of people, too, and if it can be cut (see table) why can't social spending also be cut...
...It's the revenge of erstwhile commerce secretary and deficit-monger Pete Peterson and his bipartisan cabal...
...The failure to publish the totals, of course, disguises the extent to which they continue to rise...
...Some may say that with the population and economy growing, government spending may be expected to increase...
...Perhaps the greatest mistake that Clinton and his team have made is to believe that the appeal to envy orchestrated by a comparative handful of reporters, columnists, and editorial writers really does have broad appeal across the land...
...The Clinton economic plan has allalong been an exercise in deception, with the news media acting as collaborators or dupes (take your pick...
...The purpose of the phrase "deficit reduction" is to avoid the more candid "tax increase," and at the same time to mislead voters into thinking that the change has something to do with reducing the federal budget...
...If anything, this one will be more counterproductive than its predecessor because it imposes considerably higher tax rates on the most productive members of society, and will therefore put a more severe crimp in economic growth...
...Normal people don't mind that others earn more than they do...
...It has become a convention among journalists that only the deficit, or "difference," should be published...
...The projected outlay and revenue totals expose as absurd Clinton's claim that his "deficit reduction" is made up of equal parts tax increases and spending cuts...
...The next day, major newspapers published full-page stories on the budget, but all failed to give the outlay and revenue totals...
...The Democrats have now embraced the pain-and-suffering ideology that repeatedly hurt the Republicans...
...The real problem, Seib thought, is that "a thoroughly cynical public isn't convinced that this is really happening...
...We might be a little less cynical, incidentally, if the Washington bureau of the Wall Street Journal, where Seib works, would publish the budget totals occasionally...
...It's the triumph of the insiders, who desire to recentralize the economy following the supply-side "détente...
...On April 8, the Office of Management and Budget published the 1994 federal budget...
...In a burst of candor, the Washington Post acknowledged that the budget changes will "strengthen government...
...Journalists basically approve of this transfer, but prefer to disguise it with the emollient rhetoric of deficit reduction...
...It will create an opportunity for Republicans, if they know how to exploit it...
...Meanwhile journalists have to write about something, so they describe the "chemistry" between Rostenkowski and Moynihan—a non-story I have seen in print at least four times...
...Gerald Seib went on to say that for the Clinton team, this similarity is "too close for comfort...
...The Clinton people have surely been taking their advice from the same people who told George Bush what to do in 1990...
...To that extent, the phrase is not only misleading but (I suspect) deliberately so...
...It's the upper-middle-class lefties—people like Michael Kinsley and the editorial writers of the Washington Post and the New York Times—who seem peculiarly addicted to the vice of envy, and perpetually try to arouse it in others...
...Compare those figures with the amounts that the government is now planning to spend in the same years, and you have a good measure of the extent to which the 1990 deal did not work...
...What's really going on is that the budget is being kept at about the same size, relative to GDP, but a chunk of it is being transferred from military to social spending...
...For months, the media-politico consensus has been that the Clinton presidency will be fatally damaged if the plan is not enacted, that is, if more taxes are not imposed...
...Only in federal budgeting is an increase of more than $300 billion called a cut...
...For example, in the fiscal year that starts in a couple of months (1994), spending will be $172 billion higher than George Bush thought it was going to be when he signed on to the deal...
...Sound familiar...
...An uncritical Washington press corps has permitted Clinton to talk of "spending cuts" without publishing the numbers on which his claim is based...
...7...
...The Clinton plan would cut the deficit "largely by trimming defense spending, raising top tax rates, cutting about $50 billion in Medicare payments, capping some discretionary spending, putting about a five-cent a gallon tax on gasoline and lower-ing interest pay-ments on the debt...
...A month earlier, Seib thought the problem was that "millions of Americans" had been "demagogued into believing that the deficit can be wiped out magically with spending cuts that won't affect them...
...In late June, on TV and on radio, Limbaugh repeatedly pointed out one of the more intriguing features of the Clinton (alleged) $500 billion deficit reduction package: its remarkable similarity, to the Bush (alleged) $500 billion deficit reduction package in 1990...
...Prominently displayed on page two of the thick document were the "Budget Totals Reflecting the President's Proposals," shown here...
...1994: $1,343 billion...
...At the time of the 1990 budget deal, fortunately, the Wall Street Journal editorial page published not just "the deficit" but a chart (put together by Paul Craig Roberts, published October 3, 1990) showing the actual budget totals, along with future spending plans...
...Unfortunately, his TV program was by then in summer recess...
...The similarity of the two plans is itself interesting, of course...
...All of which should give Clinton pause before embracing a very similar plan...
...In the deal that in effect sank the Bush presidency, it was agreed that future budget outlays would be: 1993: $1,381 billion...
...Aggregate spending, or outlays, will increase in the next few years from $1,468 billion to $1,781 billion...
...And it is poison...
...So it's not being reduced by that measure, either...
...The subtext goes like this: "We love you Rosty, we love you Pat, but do you love one another enough to raise our taxes...
...Spending cuts," in Washington parlance, merely means reductions inplanned increases...
...The economic plan that is on the verge of enactment will not reduce the deficit, will not yield the revenues predicted, and certainly will not create jobs...
...All these news organizations make the mistake, as Limbaugh does not, of assuming that their audience is too dumb or uninterested to grasp such matters...
...The fact is, spending is not being reined in...
...But a Congressional Budget Office analysis shows outlays as a percentage of GDP rising from 23.4 percent in 1993 to 24.1 percent in the year 2000...
...Seib detailed the similarity as follows: Bush's plan was meant to cut the deficit "largely by trimming defense spending, bumping up taxes in the top brackets, cutting about $44 billion in Medicare payments, capping some discretionary spending, putting a five-cent a gallon tax on gasoline and lowering interest payments on the debt...
...Nonetheless, he mystifyingly concluded that "the 1990 deal's spending caps are working," and that Congress has now gone even further "by nicking away here and there at discretionary spending programs...
...Clinton's plan, he wrote, is "uncomfortably similar to the 1990 package, which satisfied nobody...
...As the accompanying chart shows, the defense budget is going down, but everything else is going up...
...The stakes are enormous...
...The two administra-tions, nominally representing different parties, have responded almost identically three years apart to phony budget crises that have been hoked up as an excuse to •raise taxes...
...I was glad to see Wall Street Journal columnist Gerald Seib following up on this point three weeks later...
...Failing to place this new burden on the economy will show that Democrats "cannot govern," it is said...
...Otherwise, he said, he would have shown the chart on the screen, which really would have been a first...
...0 ne of the few journalists who has done a good job of drawing attention to the smoke and mirrors in the Clinton budget is Rush Limbaugh...
Vol. 26 • September 1993 • No. 9
