In his coverage of yesterday's Monthly Treasury Statement from Uncle Sam, the Associated Press's Martin Crutsinger, who I have criticized frequently for cruddy reporting, especially on federal finances, did a pretty good job reporting key facts and conveying very real concerns that are brewing over the country's current fiscal path.
In the process, he made a stunning admission about the economy's situation that has to be seen to be believed.
I find myself concerned that the previous paragraphs might cause Mr. Crutsinger to get called into a closed-door meeting where he gets asked what in the world is going on. If that happens, I have an agenda item he can bring up. I'll get to that later.
Crutsinger's only serious error was his final paragraph's mischaracterization of deficit trends during the Bush administration.
On Thursday, the Congressional Budget Office issued its Monthly Budget Review for December 2009. It estimates that December's federal deficit will be $92 billion when the Treasury Department releases its Monthly Treasury Statement on Wednesday, and that the deficit for the first fiscal quarter will be "about $390 billion." The CBO director's related blog post is here. The establishment press has virtually ignored it.
Here is the initial result of a Google News search on "CBO deficit" (not in quotes) for articles relating to the Congressional Budget Office's Thursday estimate of the federal government's deficit for the first quarter of its fiscal year:
Clicking on the "all 10 new articles" reveals that there are really only four results, that three of them are at blogs, and that only one of the blog posts is from an establishment media site:
The Associated Press's Tom Raum had to work really, really hard to come up with a sunny way to present today's jobs report and the President's reaction to it, which consisted of awarding $2.3 billion in "New Clean Energy Manufacturing Tax Credits."
Here's what he concocted: The weak employment report gave Obama the chance to change the subject from terrorism, where he continues to get hammered by Republican meanies, to something else. It's as if the only reason that the job losses occurred is because the Undie Bomber distracted Dear Leader's attention from his domestic agenda.
Here are key paragraphs from Raum's ramblings:
Obama refocuses on jobs after weak labor report
His agenda altered by the Christmas bombing attempt, President Barack Obama pivoted back to the domestic economy on Friday, promoting new U.S. spending to create tens of thousands of clean-technology jobs.
Despite six months of positive economic growth, Treasury collections are continuing what is now a serious two-year downward slide.
In August, the Congressional Budget Office projected that collections during the fiscal year that will end on September 30, 2010 will be $2.264 trillion (PDF; page 2 at link). That's $159 billion, or about 7.5% higher, than fiscal 2009's final total of $2.105 trillion.
There's a problem. Unless there's a surprise when the final numbers come out next week, Uncle Sam's receipts for the quarter that just ended, i.e., the first quarter of the 2010 fiscal year, are already $60 billion behind the previous year. Somehow, this is not news.
Through November, as seen here, collections were already behind last year by about $40 billion ($268.9 bil vs. $309.6 bil). From all appearances, December was little better, as its estimated take of $218 billion trailed last year's $237.8 billion.
On Thursday, the Treasury Department issued a press release, called "Update on Status of Support for Housing Programs." Its fourth paragraph reads as follows:
At the time the Federal Housing Finance Agency (FHFA) placed Fannie Mae and Freddie Mac into conservatorship in September 2008, Treasury established Preferred Stock Purchase Agreements (PSPAs) to ensure that each firm maintained a positive net worth. Treasury is now amending the PSPAs to allow the cap on Treasury's funding commitment under these agreements to increase as necessary to accommodate any cumulative reduction in net worth over the next three years. At the conclusion of the three year period, the remaining commitment will then be fully available to be drawn per the terms of the agreements.
Translation: No matter how badly things further deteriorate at these former government sponsored enterprises, both of which since last year in essence have become government-controlled enterprises, Uncle Sam (i.e., current and future generations of taxpayers) will cover their losses.
Here is how three different news outlets headlined this Treasury/Obama administration move:
The Associated Press should seriously consider renaming itself "Associated Dems" or "Associated Leftists."
This morning, the AP's Charles Babington uncritically relays the latest Democratic Party talking point about its statist health care plan that has been passed in two very different forms in the House and Senate. The supposed point is that anyone who voted to create Medicare Part D in 2003 and voted against ObamaCare is "obviously" a flaming hypocrite.
Along the way, Babington ignores a Congressional Budget Office report response issued just before Christmas asserting that characterizations of the Senate's bill as reducing future government deficits are wrong. Beyond that, the litany of other distortions and errors in Babington's report is perversely impressive in its no-fib-or-spin-left-behind comprehensiveness.
Here are the first several paragraphs of Babington's babble, followed by its final sentence:
GOP lawmakers change tune on costly health plans
Democrats are troubled by the inconsistency of Republican lawmakers who approved a major Medicare expansion six years ago that has added tens of billions of dollars to federal deficits, but oppose current health overhaul plans.
In keeping with the tradition of the holidays - the minds at MSNBC, the place for politics if you're of the lefty persuasion, decided rate the top 10 political stories of the decade.
And leading this gang of masters of the political journalism universe was "Hardball" host Chris Matthews, who on the broadcast of his Dec. 24 program, announced that conservative activism, mainly the tea party movement was the eighth biggest story of the decade - but labeled "angry white voters" (emphasis added).
"Welcome back to ‘Hardball' - our number eight political story of the decade, angry whites at town hall meetings across the country," Matthews said. "Lawmakers heard the wrath of angry voters."
On January 1, 2009, the final 4.2% stage of a four-year, 21% cut in individual income taxes took effect in Ohio. State tax withholding tables reflecting the lower rates went into effect. Ohio employees began seeing a bit more net pay in each paycheck.
This past week, the state legislature, faced with an $850 million shortfall and threats of immediate school funding cuts by Governor Ted Strickland, repealed that 4.2% cut for both 2009 and 2010. Ohioans who had taxes withheld throughout all of this year at lower levels will have to make up the difference when they file their 2009 returns next year. They will also see higher state income tax withholdings from each paycheck all of next year.
Thus, Ohioans will be paying more in income taxes for quite a while longer than they would have if things had been left alone.
But apparently we're not supposed to call this a "tax increase," and a clearly retroactive one at that. No-no-no. According to Strickland, Ohio Democrats, a few alleged Republicans, the Associated Press, and Ohio's compliant establishment media, this is a "tax cut delay." Journalists are going to extraordinary lengths to avoid writing or uttering the words "tax" and "increase" consecutively. Is there a new stylebook rule against doing that?
Here's a roundup of some the reality-avoiding language used:
CNN’s John Roberts and his guest, Jeffrey Sachs of Columbia University, pushed for President Obama to break a campaign promise to not increase taxes on those who make less than $250,000, and implement a more “broad-based” tax hike. Sachs revealed his leftist stance by blaming the trillions of dollars in debt on not taxing the rich and banks enough and calling for an end to the wars in Iraq and Afghanistan.
The CNN anchor, who described his guest, a regular contributor to the left-wing Huffington Post, as merely a “leading international economic advisor, and director of the Earth Institute at Columbia University,” first asked about the possibility of the country going bankrupt. Sachs didn’t waste any time to bring up his tax solution: “We’re not going bankrupt, but we’re not managing properly, and the gap between what we’re spending every year and what we need to spend and what we’re taxing is a persistent gap....Nobody wants to talk about the ‘T’ word...taxes. It’s the most reviled word in America...and yet, the fact of the matter is that there is no way to cut to close that gap just by cutting because the most basic things that we are doing- Social Security and health care and so forth- eat up all of that revenue.”
Longtime readers of Associated Press dispatches have long since learned that many of the most important facts of a story -- especially facts that put the government, bureaucrats, and leftists in a bad light -- are often found in its final paragraphs. This is a way for the wire service to boast that it really did report all important facts while usually ensuring that harried broadcasters and other users of AP content who attempt to digest it down to a couple of sentences will probably will leave the meaty and incriminating stuff on the cutting room floor.
Such is the case with a report on the arrest of dozens of Medicare ripoff artists in various US cities. While the details of the arrests are indeed important, the final three paragraphs of AP writer Kelli Kennedy's report are the real jaw-droppers, especially in the context of the president's and Congress's dogged determination to set a statist takeover of the entire health care system into motion before the end of this year (bolds are mine):
However, these Democrats would be doing themselves and their audiences a favor to take notice of two Fox News anchors, "Your World" host Neil Cavuto and the weekend edition of "America's News HQ" co-host, Gregg Jarrett. The two recently challenged two Republican members of Congress, Sen. Charles Grassley, R-Iowa, and Rep. Aaron Schock, R-Ill.
On the Dec. 12 broadcast of Fox News Channel's "America's News HQ," host Gregg Jarrett took on Grassley, who made an appearance to rail against federal spending, but all the while having so-called "pork project" money earmarked for his home state (emphasis added).
In his coverage of Uncle Sam's November Monthly Treasury Statement released yesterday, the Associated Press's Martin Crutsinger reached the wire service's usual quota of errors and misstatements. But what's remarkable is that the AP reporter's article seems to betray a belief that the country is still in a recession. Fascinating.
Along the way, Crutsinger omitted the fact that November's deficit came in a bit higher than the Congressional Budget Office estimated several days ago, failed to report that receipts from corporate income taxes went negative for the second month in a row (i.e., refund checks issued exceeded cash collections), and betrayed more than a little lack of understanding of how the government has chosen to account for the Troubled Asset Relief Program (TARP).
Blogger Doug Ross got to the news of the Congressional Budget Office's Monthly Budget Report (PDF) over the weekend, quite accurately observing that the establishment news coverage of its content barely existed.
The coverage yesterday by the Associated Press's Stephen Bernard of payroll and human resources giant ADP's monthly jobs report for November focused on a relatively small reduction in the size of the decline in jobs lost and not on the fact that continuing to lose jobs is a bad thing.
That rhetorical sleight of hand enabled the AP reporter to tell us that ADP's reported private sector job loss during the month of 169,000 -- down from 203,000 in October -- was actually good news, because even though it was a decline in the number of people working, the decline of the decline "was not as much as forecast." The forecast was for 160,000 jobs lost.
Readers of a previous version of this post will note that I allowed myself to believe that Bernard had erred when he did not. I apologize for not getting that right. And here I thought I would make it through the whole year without a mistake. :-->
On Wednesday’s Good Morning America, ABC’s George Stephanopoulos highlighted House Democrats’ opposition to any troop increase in Afghanistan on budget grounds, but did not address the inconsistency of this position, since most of these congressmen support spending hundreds of billions on health care “reform.”
Before bringing up the budget issue, Stephanopoulos preemptively apologized for President Obama’s upcoming speech on Afghanistan. After guessing that it was going to be 30-40 minutes long, the anchor continued that Obama “needs that much time because this is a very difficult speech.” Just before this, the ABC anchor acted like the President himself was going to be the sole author of the speech: “I was just talking to a couple of White House aides. They say the President is actually going to begin writing the speech today. He hasn’t begun writing yet. He just made the decision [on the troop increase] the other night.”
At the end of CBS’s Face the Nation on Sunday, host Bob Schieffer fretted over massive government spending but avoided blaming current Democratic proposals: “I’m not even talking about the cost of health care....It is now costing $1 million a year to keep one U.S. soldier on the ground in Afghanistan, not to mention that for every soldier there, we have one civilian contractor.”
Schieffer also cited reconstruction costs in Iraq: “I picked up the New York Times to discover we have spent more money rebuilding Iraq’s schools, hospitals, water treatment and electrical plants – $54 billion – than we have spent on any construction project since the Marshall Plan.” He described his reaction to the war spending: “...last week I got surprised – no, I should say had a jaw-dropping shock – a better way to put it – every time I picked up the newspaper and read about the numbers that we’re throwing around lately.”
In concluding his commentary, Schieffer wondered: “...when President Obama came calling to China, we owed the Chinese more than a trillion dollars...is going a trillion dollars in hock to one country made us more secure?”
What's $100 million of taxpayer money between a few U.S. Senators?
After reports surfaced of $100 million for Louisiana was added to the Senate's health care reform legislation, originally from ABC News, and subsequently commented upon by prominent lefties, like U.S. News and World Report's Bonnie Erbe as my colleague Noel Sheppard pointed out, Sen. Mary Landrieu, D-La., took the Senate floor on Nov. 21 to announce she would vote in favor to proceed forward with the Senate Democratic leadership's bill.
She also responded to allegations that $100 million earmarked for the Louisiana was added to that legislation to sway her vote. She referred to the likes of ABC News correspondent Jonathan Karl and Erbe as "very partisan Republican bloggers."
"I know that might time is up, but I would like to ask personal privilege for just one more minute to address an issue that has come up unfortunately in the last 24 hours by some very partisan Republican bloggers so I need to respond I think and will do so now," Landrieu said. "One of the provisions in the framework of this bill that I've just decided to move on to debate has to do with fixing a very difficult situation that Louisiana is facing and any other state that might have a catastrophic disaster - let's hope they don't - like we did in 2005."
At this point, there should be little doubt that there is a concerted attempt underway to use the war in Afghanistan as a justification for punitively taxing high earners.
Last weekend (noted at NewsBusters; at BizzyBlog), the New York Times discovered that wars cost money. It cited Wisconsin Democratic Congressman David Obey's concern that funding the Afghanistan effort at the level requested months ago by General Stanley A. McChrystal would "devour virtually any other priorities that the president or anyone in Congress had."
Thursday, as reported by AFP (noted last night at NewsBusters; at BizzyBlog), House Democratic heavy-hitters Barney Frank, John Murtha, and (no surprise) Obey announced the "Share The Sacrifice Act of 2010," an income-tax surcharge that overwhelmingly targets high-income earners.
Now Michigan Democratic Senator Carl Levin has weighed in. Bloomberg dutifully carried his water, as seen in this graphic containing the first four paragraphs of the report:
In what appears to be the opening round of a rearguard action against what leftists used to call "the good war" (only because they felt they needed to pretend they had pro-war bona fides to make their anti-Iraq War arguments look stronger to the general populace), the New York Times's Christopher Drew reported last Saturday for the Sunday print edition that sending more troops to Afghanistan as General Stanley A. McChrystal has requested might cost tens of billions of dollars.
While President Obama’s decision about sending more troops to Afghanistan is primarily a military one, it also has substantial budget implications that are adding pressure to limit the commitment, senior administration officials say.
In the alternative universe known as Government/General Motors Land, you can:
Talk about how your financial results are going to be better than last year's and in the next breath caution that the numbers won't be comparable.
Inform the public that the financial information to be released on Monday isn't going to be prepared in accordance with generally accepted accounting principles (GAAP), and is going to simply skip about 3-1/2 months of activity that will apparently never be reported, even though your majority-owning government forces your publicly-held competitors and every other publicly-held company to prepare full-blown financial statements under those same GAAP rules.
Tell the world that you're a private company, even though the federal government owns a majority of your stock (in effect making you more of a public company than any other public company around), and thereby insist that you're doing the world a favor by releasing any financial information at all.
In the alternative reporting universe known as the Associated Press, you parrot these points without questioning whether they are correct, proper, or even less than fully transparent.
In a report that is so riddled with bias and factual errors it's hard to know even where to begin, Associated Press Writers Tom Raum and Andrew Taylor yesterday gave making President Obama look like a born-again deficit hawk their best shot.
The pair's work is partially saved here for fair use, discussion and in this case entertainment purposes.
The biggest error Raum and Taylor made was publishing the following "we wish it were true" statement:
The national debt is the accumulation of annual budget deficits. The deficit for the 2009 budget year, which ended on Sept. 30, set an all-time record in dollar terms at $1.42 trillion.
Well, Tom and Andy, using this readily available tool, if that's the case, why was the national debt on September 30, 2008 $10.02 trillion and then $11.91 trillion on September 30, 2009? That's a difference of $1.89 trillion, a whopping $470 billion more than the past year's $1.42 trillion deficit.
The answer is, sadly, that the national debt is NOT the accumulation of annual budget deficits, as shown in the graphic that follows:
After all, AP business writers Martin Crutsinger and Daniel Wagner did give us the facts about Uncle Sam's October Monthly Treasury Statement, put them into historical context, and told us that we face $1 trillion-plus shortfalls in fiscal 2010 and 2011.
But the pair missed a couple of receipts-related items that would have hit readers right between the eyes if noted, and would have indicated just how dire the government's financial situation has become.
The first omission: Collections of corporate income taxes were negative, as the government paid out an astonishing $4.5 billion more in refunds to corporations than it collected. The second: In a month mostly unaffected by individual estimated payments (these are normally paid in April, June, September, and January), year-over-year collections of individual income taxes were down by 29%.
Here are the key paragraphs from Crutsinger's and Wagner's coverage:
With the unemployment rate soaring in 10.2 percent in Friday's report on October, two old hands in the Washington press corps appeared on Sunday morning shows where they asserted that means we need another stimulus bill and/or the problem is the current “stimulus” bill wasn't big enough. On This Week, ABC News vet Sam Donaldson maintained “we're going to have to have more stimulus, more spending.”
Over on NBC's Meet the Press, Washington Post columnist E.J. Dionne, a former Washington correspondent for the New York Times before covering politics for the Post, complained: “The problem is the stimulus was too small, and they compromised it down and so you had less effect. I mean, the fact is these numbers would be a lot worse without the stimulus.”
The August Congressional Budget Office budget forecast for the fiscal year that began last month says that Uncle Sam will take in $2.264 trillion from October 2009 through September 2010. That's an increase of 7.6% over fiscal 2009's intake of $2.105 trillion.
Though it won't be official until Tim Geithner's crew releases its Monthly Treasury Statement next week, it's virtually certain that the government's collections will open the year in a deep hole compared to last year, and probably well behind what CBO expects.
Take a look at this compilation of key items from October's final Daily Treasury Statement, compared to the actual results from October 2008 and 2007:
The paper's headline at its report on Thursday's government announcement that the nation's Gross Domestic Product (GDP) came in at an annualized 3.5% after four consecutive quarters of decline was not only over the top. Its message went directly against an admonishment by an economist quoted in Paul Davidson's underlying report, which was to not "get carried away by the really strong number."
Many commentators, while gratified that GDP growth occurred, have cautioned that the growth was influenced heavily by government programs that either have already run their course with debatable long-term impact (e.g., Cash for Clunkers), or are probably not going to last much longer even if extended (e.g., the first-time homebuyers' credit), simply because the government is running trillion-dollar annual deficits and can't afford them.
Now that the Obama administration is attempting to take a victory lap on the U.S. economic recovery, claiming the $787-billion stimulus passed earlier this year was what did the trick, despite a cost of $160,000 per 'stimulus' job, as ABC's Jake Tapper pointed out, it has come at the cost of the U.S. dollar.
Since then, the stock market has rebounded nicely. The Dow Jones Industrial Average (DJIA) is off a March low of 6,547 points, even topping the 10,000-mark recently. But what has caused this nearly 50-percent jump? According to CNBC's Larry Kudlow - loose monetary policy by the Federal Reserve, with low interest rates, has made it possible for the markets to rise, with the 'loose' money going into the market.
"The funny thing is, Steven, it has gone into stocks - I mean the stock market guys ... there's no real multiplier for the economy, right?" Kudlow said on his Oct. 30 CNBC program. "But it has gone into stocks and the stock market crowd wants to see the Fed to keep pouring the money in no matter what happens to the U.S. dollar."
It would appear that the Apparatchik Press -- er, the Associated Press -- thinks that part of its job is to soften the impact of embarrassing admissions made by Obama administration members.
Take the wire service's Thursday afternoon AP report by Jim Kuhnhenn on Council of Economic Advisers' chair Christine Romer's observations about the stimulus package. Romer said (in AP's words) that "the government's economic stimulus spending has already had its biggest impact," and will (in Romer's words) "likely be contributing little to further growth by the middle of next year."
As you'll see shortly, AP's headline doesn't reflect what Romer said. Additionally, Kuhnhenn allowed Romer to mischaracterize the economy's performance in the second quarter without challenging it, and saved the big news -- yet another administration official admitting that unemployment will stay near double digit through the end of next year -- for his eighth paragraph.
Here's a graphic capture of Kuhnhenn's first eight paragraphs, posted for fair use and discussion purposes:
As I pointed out Monday night (at NewsBusters; at BizzyBlog), Associated Press reporter Martin Crutsinger, in his Saturday morning report on the federal government's full-year fiscal results, conveniently "forgot" about a major accounting change that enabled President Obama's Treasury Department to report a final "deficit" of "only" $1.417 trillion.
That's hundreds of billion of dollars lower than the $1.75 trillion expected in February. The change, which caused "investments" in financial institutions, General Motors, Chrysler, and other entities to be accounted for on a "net present value" (NPV) basis, had an initial impact of over $175 billion when first implemented. Crutsinger ignored the change, even though its implementation occurred after that February estimate.
Though the end of a fiscal year represents a perfect opportunity to extend readers' understanding of how our government (sort of) works, Crutsinger also did not tell readers that the reported "deficit" is nowhere near the amount of the increase in the national debt that occurred during the fiscal year. As of September 30, the national debt was $11.910 trillion, or $1.885 trillion higher than the national debt a year earlier. That means that the most recent year's "unreported deficit" was $468 billion.
One other area where Crutsinger erred was in his breezy opening paragraph assessment that the precipitous drop in cash receipts during the most recent fiscal year -- officially understated for a reason I will note shortly -- was entirely due to the recession:
Though its $1.4 trillion red-ink result was mostly known well ahead of its final issuance, the Treasury Department either conveniently got its year-end accounting work done in time for a Friday afternoon release of the final Monthly Treasury Statement, or held it until that time. Last year's report was released on Wednesday, October 15.
The final statement shows receipts of $2.105 trillion, "outlays" of $3.522 trillion, and a "deficit" of $1.417 trillion. That is $962 billion higher that last year's "deficit" of $455 billion.
The terms "outlays" and "deficit" are in quotes for reasons I will explain in this post.
There is good news and bad news about the reporting on the results by the Associated Press's Martin Crutsinger. The good news is that after at least three months of obsessing over how the wars in Iraq and Afghanistan were contributing to the massive increase in this year's "deficit" compared to fiscal 2008 when they have been almost completely if not totally irrelevant (here, here, and here at NewsBusters; here, here, and here at BizzyBlog), Crutsinger correctly dropped them from the discussion. Of course, that means he was repeatedly wrong to cite those wars or even defense spending as a whole as a contributing factor in the first place. But don't wait by the phone for Martin's apology.