The Bush administration vs. its economists
The Economic Report of the President contradicts President Bush and other
top officials.
By Brendan Nyhan (brendan@spinsanity.org)
February 13, 2003
Last week, President Bush's Council of
Economic Advisors (CEA) released the 2003 Economic Report of the President (ERP) to little notice from the press or public [2.7 MB PDF]. Yet the report, which is produced by the professional economists
and staff of the CEA, directly contradicts a number of public statements by the President and other administration officials
on two key economic issues: the effects of tax cuts on revenue and the relationship between budget deficits and interest rates.
As the federal budget has slid into deficit,
President Bush has become more outspoken in his claims that tax cuts actually increase revenues for the federal government,
as Dana Milbank has documented in the Washington Post. On November 13, the President stated, "Well, we have a deficit because tax revenues are down. Make no mistake about it, the tax relief package that we passed
-- that should be permanent, by the way -- has helped the economy, and that the deficit would have been bigger without the
tax relief package."
Then, on January 7, he made a similar claim in promoting his new tax cut package, claiming that the proposals "are essential for the long run... to lay
the groundwork for future growth and future prosperity. That growth will bring the added benefit of higher revenues for the
government -- revenues that will keep tax rates low, while fulfilling key obligations and protecting programs such as Medicare
and Social Security."
Other administration officials have followed
Bush's lead, including Vice President Cheney during a speech on January 30 at the Conservative Political Action Conference:
The President's proposals will reduce the tax burden on the American people by $670 billion over
the next 10 years. By leaving more money in the hands of the people who earn it, people who will spend and invest and save
and add momentum to our recovery, we'll help create more jobs and ultimately increase tax revenues for the government.
And Press Secretary Ari Fleischer added this during a January 8 press briefing: "The entire package the President does believe will lead to growth, which will over
time grow the economy, create additional revenues for the federal government and pay for itself."
The reality is that almost all economists
view these claims as implausible, and even the most ardent proponents of so-called supply-side economics have disowned their
previous claims to this effect, as Jonathan Chait pointed out in The New Republic. The ERP