Chewing the figures

Posted: Jul 29, 2006 12:01 AM
Chewing the figures

Fifty years ago, Sen. Paul Douglas of Illinois appeared in the Senate chamber lugging a huge manuscript. He plopped it on the rostrum and -- wept. Yes, he actually cried. Tears ran down his face. When he recovered, he addressed his colleagues.

"That," he said, pointing to the mass of paper, "is the budget. I have spent the past three days studying it. I am a professional economist. I can tell you that there are only two people in the United States who know what is in this budget: the director of the budget, and I. And I weep because notwithstanding that I was a college professor, I am incapable of telling you what is in that budget."

And that was 50 years ago! Talk about mutatis mutandis : 1956 to 2006 -- the federal budget.

But let us attempt two things at this sitting. The first is to give in simple figures the case against President Bush. Here is the spending reduced to percentage comparisons, as done for USA Today by Richard Wolf this April. Wolf speaks of eight categories in which federal spending has risen, starting with "Pumping Up the Pentagon," "Leaving No Child Behind," and "Protecting the Homeland."

"This year," Wolf writes, "Congress trimmed $39 billion over five years from benefit programs. The White House wants to go further 'to prevent (Wolf is quoting Scott Milburn of the White House Office of Management and Budget) severe economic and fiscal consequences for our children and grandchildren.'"

Wolf then compares Bush with the previous seven presidents in terms of overall federal spending, spending on defense and spending on K-12 education. He gives the average annual change in spending for each administration in these three categories (all adjusted for inflation):

Overall Defense Education

Johnson 6 percent 5 percent 31 percent

Nixon-Ford 3 percent minus 6 percent 3 percent

Carter 4 percent 3 percent 1 percent

Reagan 3 percent 4 percent 0 percent

G.H.W. Bush 2 percent minus 4 percent 5 percent

Clinton 2 percent minus 2 percent 3 percent

G.W. Bush 5 percent 8 percent 7 percent

Never mind -- at this moment -- qualifying one's reactions on the basis of national and international events. The fact of it is that the increased expenditures by President Bush stand out hugely compared to all seven predecessors except Johnson.

But listen now to Karl Rove, the president's principal exegete. He spoke to the American Enterprise Institute six weeks after Wolf's article appeared in USA Today.

Mr. Rove began by describing the scene in the last year of President Clinton's tenure. Rove summarized what it is one sees when the economy is declining, namely, falling investment, falling consumer confidence and falling stock markets. "The stock market began its decline in mid-January 2000, dropping from an all-time high of more than 11,700 in the Dow to below 9,800 in early March 2000." By the third quarter of 2000, GDP had declined by an annual rate of 0.5 percent. "And all of this took place before George W. Bush set foot in the Oval Office."

The Bush administration moved in on (1) taxes, (2) trade and (3) spending.

The charge that only the rich were the beneficiaries of the tax cuts? Rove answers: "If this were true, then logic tells you that the percentage of federal income taxes paid by the wealthy would be falling after the tax cuts." That did not happen: The top 1 percent of the nation's earners, those making more than $317,000 per year, saw their share of the nation's income tax go up (by 1.5 percent), not down. The top 3 percent (making more than $200,000) paid a 5 percent larger share of taxes. Rove quoted a finding of The Wall Street Journal: "For every 100 Americans today, the wealthiest three are paying taxes equivalent to the other 97 combined."

And, of course, Rove spoke of the great paradox: tax rates down, but revenues up. "If revenues for 2006 grow by 11 percent, then federal taxes will be equivalent to 18.4 percent of the economy, higher than the 40-year historical average. In the words of The Wall Street Journal, this is 'the largest two-year increase in tax revenue collections, after adjusting for inflation, that has ever been recorded."

Karl Rove is exuberant on the matter of U.S. trade. In 2005, 52 percent of all U.S. goods exported went to our free-trade partners, nations that represent only 14 percent of the world's GDP. "Clearly," Rove concluded, "it is in our interests to tear down walls to the sale of American goods and services around the globe." And, Rove insists, Mr. Bush has reduced the growth of non-security discretionary spending every year he has served.

A grand reconciliation of these two sets of figures is a challenge -- not only for Karl Rove and USA Today, but for all voters. And all taxpayers.


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