White House budget director Rob Portman is one of the smartest guys working in government, so it was nice to see him on CNN this afternoon rebutting today’s New York Times editorial on the budget:
The NYT alleged, “Earlier this year, the administration conveniently projected a highly inflated deficit of $423 billion. With that as a starting point, the actual results [$296 billion] can be spun to look as if they’re worth cheering.” Portman responded:
I woke up this morning to that editorial. I was, to say the least, a little surprised and disappointed. The figures in February, as you know Wolf, were based on the professional career people at the Treasury Department telling us what the revenues were likely to be for this year. That was 6.1 percent. Now they’re telling us, because of the actual receipts coming in in the first eight months, that it’s likely to be 11.4 percent. That results in 90 percent of the very great news we got today, which is that the deficit is going to be 30 percent lower.If at the time in February the career professional folks had said 12 percent, of course we would have cheered. It would have been much better news for the administration. Why would we have done that? Why would we have overinflated at that time? We rely on the professionals to give us the estimates on revenues. The New York Times knows that. And that’s why I thought that editorial was rather unusual.
Unusual? I think Portman is guilty of “overinflating” the intellectual honesty of the New York Times editorial board. Unsurprising is more like it.
UPDATE: At the Huffington Post, Ankush Khardori chides me for buying Portman’s “spin.” He points to the fact that this is “the third year in a row that the midyear deficit projections have come in significantly lower than the numbers predicted at the start of the year,” and criticizes me for ignoring this historical evidence.
I ignored this “evidence” because it is irrelevant to Portman’s argument. For one thing, it is not evidence of anything other than the Treasury Department’s propensity to underestimate revenue. Conservatives argue that this is because it is exceedingly difficult to account for the supply-side effects of tax cuts. Obviously, the Bush tax cuts are stimulating a lot of economic activity at the upper ends of the economic spectrum, which has led to a surge in revenues. That’s precisely the sort of thing Treasury is ill-equipped to measure (although the Office of Tax Policy is taking steps to address this by incorporating dynamic scoring models into its estimations).
Also, Khardori fails to consider Portman’s argument that career professionals – not political appointees – make these revenue estimations. Khardori could have countered that Bush has politicized the entire Department of the Treasury, but he did not. He didn’t address that point at all.
Was Portman spinning? Of course. All government officials do. But in this case, he was spinning back against a partisan editorial board that made a wild charge based on nothing more than circumstantial evidence.
UPDATE II: The LA Times also makes this charge without a shred of evidence: “Deficit Good News Less Than Meets the Eye“:
Even economists who hesitate to accuse the White House of playing games say the claims of good news on the budget are unfortunate because they make people unjustifiably sanguine about the government’s current fiscal health.
Watch the Portman clip. Near the end he says:
… it looks very good short term. Our deficit picture is improving greatly. Our fiscal house is in order short term. The problem is longer term and the president did talk about this today. And that again is the entitlement spending I talked about earlier. That is increasing at unsustainable rates. That will come back to cause us great budget problems over the next 20, 30 years unless we resolve those issues and do so in a bipartisan way soon.
Does this sound like a man who wants people to be ”sanguine about the government’s current fiscal health”?
The administration is happy about the surge in revenue because it demonstrates that the economy is booming — thanks in no small part to the Bush tax cuts. At the same time, it is warning people that unless Congress reforms entitlement spending, we are headed for a disaster.
The president has proposed that we start the reform process with a Social Security overhaul that includes private accounts. The Democrats’ proposal? Just raise taxes.