Bush Press Secretary Tony Snow has a problem, which he resolves by being as stupid as he can. He is asked a question. How does he answer?
Tony Snow doesn't dare answer: "The President has said that the tax cuts grow the economy and help balance the budget. Next question?" That would kill his remaining credibility with the press corps.
Tony Snow doesn't dare answer: "Because of the tax cuts the deficit is larger than it would have been with higher taxes, but the economy is stronger, and the tradeoff is worth it." That would get him fired by Bush within the week. And
Tony Snow doesn't dare answer: "The administration economists have tried to get Bush to drop the 'tax cuts help balance the budget' line because it is misleading and wrong and it harms the administration each time Bush or Cheney uses it. But they have had no success." That would have the advantage of being the truth, but it would get him fired by Bush within the hour.
So what does he do? He acts as stupid as possible:
http://www.whitehouse.gov/news/releases/2007/02/20070206-6.html: Q Can I ask you about an argument the President made today and has made repeatedly in terms of the tax cuts? He speaks of the economic output that is raised by the tax cuts. But he specifically is crediting his tax cuts for the increased revenues to the U.S. Treasury. Does the President believe that the tax cuts have paid for themselves, or will pay for themselves anytime in the foreseeable future?
MR. SNOW: What you're doing is you're getting yourself into abstruse ground. There are any number of ways of calculating it. By some calculations they have paid for themselves and then some. But what I'd ask to do before getting into that thicket is to find out what you want to use as your base, know what your baselines are, because whenever one gets into games like this, it's all about assumptions. And I don't know what assumptions are embedded in the question.
Q I'm not sure I'd look at it as a game, but when the President says low taxes means economic vitality, which means more tax revenues --
MR. SNOW: Yes.
Q -- does the Treasury tell him that more money is coming in than was lost to the tax cuts?
MR. SNOW: Well, I'm not sure -- the whole point is that the tax cuts generate extra economic activity. All you have to do is -- I would, if you want to --
Q That's a separate issue.
MR. SNOW: Well, no, it's not. It's not a separate issue at all. What it says is when you have greater economic --
Q If the economy is growing more, that's one thing; but whether tax revenues are growing is a separate issue.
MR. SNOW: Well, but tax revenues tend to grow in tandem with economic activity. When you've got a growing economy -- let's take a look at what we have. We have an economy where we've had economic growth for 42 consecutive months. You also have an economy that now has more people working than ever before. You've got higher levels of employment, home ownership, economic activity. Wages, especially in recent months, have shown real significant growth. Real disposable income up 5.4 percent in the fourth quarter of last year. You put all that together, you're going to have more revenue. And the fact is, a good, growing economy is always good for revenues.
Q I'm asking specifically about the budget, which is what the President was arguing about today. And when he says low taxes means more tax revenues --
MR. SNOW: Yes, that's right.
Q -- he is, in a sense, saying that it makes it easier to balance the budget, is he not?
MR. SNOW: Yes. A growing economy always makes it easier to balance the budget.
Q No, that cutting taxes in the way he's done makes it easier to balance the budget.
MR. SNOW: But cutting the taxes -- you're not connecting the dots. Cutting the taxes, in fact, is something that encourages economic growth. And it is that economic growth that ends up generating the revenue, that allows you to balance the budget ahead of time.
Q But has the Treasury told him that the tax cuts enacted on his watch make it easier to balance the budget?
MR. SNOW: I'm not sure that anybody has framed it that way. Call over to Treasury, ask them.
Q I've looked at their analyses; I don't see it, is why I'm asking.
MR. SNOW: Like I said, that's why -- when you talk about pay-for, that really does get into how are you cutting it, and what are you using as your baseline, what's your projection, what are the assumptions. That is not as simple a question as you might think it is. It just isn't. Whenever you get into --
Q I know this debate is to how big the effect is, but I've not seen it --
MR. SNOW: But I've also heard people say, yes, we can say it's paid for. But you're asking me to play the role of economist, and as any first-year economic student will tell you, it's all about assumptions. So if you want to get into that argument, I really would suggest you talk to trained economists at the Department of Treasury or within our economic shop, and they'll be able to give you a more precise readout on it.
Tony Snow talks about what an economist will tell you. Let's find an economist--Dartmouth's Andrew Samwick, who was Chief Economist on Bush's Council of Economic Advisers in 2003-2004. Here's what he says:
Andrew Samwick: To anyone [currently] in the Administration who may read this.... Please stop your boss from writing or saying the following:
It is also a fact that our tax cuts have fueled robust economic growth and record revenues.
You are smart people. You know that the tax cuts have not fueled record revenues. You know what it takes to establish causality. You know that the first order effect of cutting taxes is to lower tax revenues. We all agree that the ultimate reduction in tax revenues can be less than this first order effect, because lower tax rates encourage greater economic activity and thus expand the tax base. No thoughtful person believes that this possible offset more than compensated for the first effect for these tax cuts. Not a single one.
The only bright spot is that Tony Snow doesn't dare back George Bush up. Tony Snow doesn't dare say: "The President has said that the tax cuts grow the economy and help balance the budget. Next question?" That's something--not very much, but something.