How can you cover a story about Uncle Sam's November Monthly Treasury Statement and the proposed Obama-GOP compromise on taxes and unemployment benefits without using the words "spending," "receipts," any form of "collect," or "unemployment"? It's a neat trick, but the Associated Press's Martin Crutsinger pulled it off in his Friday afternoon dispatch shortly after the government report's release.
Instead of communicating apparently boring facts, Crutsinger concentrated his fire on the "tax-cut agreement" with a supposed "cost (of) $855 billion over two years" worked out by President Obama and Congressional Republicans. In doing so, he "somehow" failed to mention that the proposal includes a 13-month extension of unemployment benefits.
Based on a comparison to this detailed analysis at the Hill, which reported yesterday that the proposal's "cost" is really $857 billion over 10 years, Crutsinger's two-year, $855 billion "cost" assertion, which does not include a detailed breakdown, appears to be wildly inaccurate.
For the record, since the AP reporter failed to relay it, the government took in $149.0 billion in November and has collected $294.9 billion through two months, up $25 billion or 9.7% from the same time last year. It also spent $299.4 billion in November and has burned through $585.7 billion in two months, up $20.2 billion or 3.6% from a year ago. Crutsinger did deign to tell us that the November and year-to-date deficits were $150.4 and $290.8 billion, respectively.
Here are excerpts from his report, with misleading language in bold:
November federal budget deficit highest on record
The federal budget deficit rose to $150.4 billion last month, the largest November gap on record. And the government's deficits are set to climb higher if Congress passes a tax-cut plan that's estimated to cost $855 billion over two years.
For the first two months of the current budget year, which began Oct. 1, the deficit totals $290.8 billion. That's 2 percent less than for the same period a year ago. And economists had been estimating that the full-year deficit would decline after two years of record highs.
But analysts say the tax deal President Barack Obama reached with Republicans this week will give the 2011 budget year the largest deficit in history - $1.5 trillion, according to economists at JPMorgan Chase. It would mark the third straight year of trillion-dollar-plus deficits.
Under the tax-cut plan, JPMorgan economist Michael Feroli said he expects a $1.5 trillion deficit this year to be followed by a $1.2 trillion gap in 2012.
Many economists had expected Congress to extend the tax cuts that were enacted in 2001 and 2003. And they had included those extensions in their deficit forecasts for coming years. But they hadn't factored in other parts of the tax-cut plan, notably a 2 percentage-point cut in workers' Social Security tax for next year. That will cost the government an additional $112 billion over the next year.
Thanks to Crutsinger's poor reporting, readers will believe that the entire $855 billion "cost" involves "tax cuts." That's simply not true, on at least three counts:
- Continuation of the tax structure that has been in effect for the past eight tax years (2003-2010), wherein federal income tax rates will be the same in 2011 as they were in 2010, is not a tax cut.
- Since there has been no death tax during calendar 2010, the proposal's reinstatement of the tax, even at lower rates and with higher asset exemptions, is a cut-and-dried, drop-dead obvious example of a tax increase, not a cut.
- The unemployment benefits extension clearly involves s-s-s-s ... spending, not taxes.
As noted several times before, the AP's news narrative drives the news reporting by its thousands of subscribing outlets, including very many local TV and radio newscasts. If you hear "tax-cut deal" or a similar term over the airwaves during the next several days, there's a good chance that the misleadling raw material came from the AP and writers like Martin Crutsinger. Their net contribution to a constructive dialog about taxes, spending, and deficits is clearly negative.
Cross-posted at BizzyBlog.com.