Hilzoy Speaks Ill of the Living
David Leonhardt Has Been on Fire for the Past Couple of Months

John McCain Leaves Budget Reality Far Behind...

To John McCain's promises to (a) wage more wars abroad and (b) cut taxes for the rich while (c) limiting domestic spending cuts to waste, fraud, and abuse he has now added a promise to balance the budget by 2013--a promise that his substantive policy advisorrs had been trying to keep him from making all winter and spring. Their view was that George H.W. Bush's promise in 1988 not to raise taxes had brought him little short run political gain and had done so at the price of making his presidency a failure (cf Richard Ben Cramer, What It Takes).

How does America's press react? Well, in a way that makes me say: "Why oh why can't we have a better press corps?" For today we have an edition of the Politico Death Spiral Watch...

Mike Allen writes, apropos of John McCain:

McCain promises to balance budget: McCain’s emphasis on balancing the budget is likely to excite conservatives, who have remained skeptical of his candidacy, and provoke derision from Democrats, who will argue that it’s a warmed-over version of proposals that President Bush failed to enact...

Mike Allen is on record on what the role of a journalist is. As Matthew Yglesias reported:

He Said / She Said: [Reporters,] I said, aren't... giving... "just the facts, ma'am."... Rather, they're trying to act as neutral arbiters between contending parties.... [C]ontroversy about a basically factual subject ("what's the effect of X on the deficit?")... goes unresolved by [the] news writer.... [who] gives us a set of meta-facts -- "Joe says 'X' but Sam says 'Y.'" Bloggers... think the facts are partisan. When I say that the Bush Social Security plan involves a huge quantity of transition debt that risks provoking a fiscal crisis, I'm trying to state some facts... not offering "opinions" as such....

Allen took issue.... He said that news writers are trying to present both sides' points-of-view, hence the "he said, she said" quality to it, but that they're trying to present these points-of-view in such a way so that a discerning reader can tell who's right based on reading the story...

Is McCain's newfound "emphasis on balancing the budget" a joke, to which the only proper response is derision and laughter, or it is a serious statement of policy intentions that should excite fiscal conservatives like me who think the budget should be much closer to balance?

Let's see how Mike Allen does at planting clues in his article so that a "discerning reader" can tell who is right:   

Paragraph 1: Sen. John McCain (R-Ariz.) plans to promise on Monday that he will balance the federal budget by the end of his first term by curbing wasteful spending and overhauling entitlement programs, including Social Security, his advisers told Politico...

No clues as to who is right here...

Paragraph 2: The vow to take on Social Security puts McCain in a political danger zone that thwarted President Bush after he named it the top domestic priority of his second term...

No clues as to who is right here...

Paragraph 3: McCain is making the pledge at the beginning of a week when both presidential candidates plan to devote their events to the economy, the top issue in poll after poll as voters struggle to keep their jobs and fill their gas tanks...

No clues as to who is right here...

Paragraph 4: “In the long-term, the only way to keep the budget balanced is successful reform of the large spending pressures in Social Security, Medicare, and Medicaid,” the McCain campaign says in a policy paper to be released Monday.

No clues as to who is right here...

Paragraph 5: “The McCain administration would reserve all savings from victory in the Iraq and Afghanistan operations in the fight against Islamic extremists for reducing the deficit. Since all their costs were financed with deficit spending, all their savings must go to deficit reduction.”

No clues as to who is right here...

Paragraph 6: The pledge is a return to an earlier position he'd later backed away from. On April 15, McCain backed off a February pledge to balance the budget in his first term when asked about it by Michael Cooper of  The New York Times, who reported that McCain said “at a news conference … that ‘economic conditions are reversed’ and that he would have a balanced budget within eight years.”

No clues as to who is right here...

Paragraph 7: McCain advisers admit that the document is a repackaging of previous policies, without dramatic new initiatives. Some Democratic officials had thought McCain might try to make a splash by proposing a bold middle-class tax cut.

No clues as to who is right here...

Paragraphs 8-9: Jason Furman, Obama's economic policy director, called McCain's pledge “preposterous." Furman pointed out that the Congressional Budget Office now estimates a 2013 deficit of $443 billion, assuming the Bush tax cuts are extended. And he estimated that McCain would have to cut discretionary spending--including defense--by roughly one-third to bring the budget into the black by then. "McCain would have to pay for all of his new tax cuts and other proposals and then, on top of that, cut an additional $443 billion from the budget--which is 81 percent of Medicare spending or 78 percent of all discretionary spending outside of defense," Furman said.

Let's come back to these later...

Paragraph 10: McCain’s tour of swing states is designed to relaunch his candidacy after a high-stakes shakeup last week in his campaign organization, which has been widely criticized as soft and slow compared to the Obama machine.

No clues as to who is right here...

Paragraph 11: Sen. Barack Obama (D-Ill.) also is spending the week emphasizing economic issues, and plans to tout the family-friendly, bottom-up benefits of his proposals.

No clues as to who is right here...

Paragraph 12: Obama begins the week in Charlotte, N.C., with what his campaign calls “a discussion on economic security for America’s families.”

No clues as to who is right here...

Paragraph 13: The Obama campaign sought to steal McCain’s thunder by holding a conference call Sunday to portray McCain as out of touch and not up to the job on economic matters.

No clues as to who is right here...

Paragraph 14: McCain’s emphasis on balancing the budget is likely to excite conservatives, who have remained skeptical of his candidacy, and provoke derision from Democrats, who will argue that it’s a warmed-over version of proposals that President Bush failed to enact.

No clues as to who is right here...

Paragraph 15: The budget was in surplus when Bush took office but now is deeply in the red—$410 billion, the White House projects, blaming the demands of war and homeland security.

No clues as to who is right here...

Paragraph 16: McCain begins his tour in Colorado, then goes on to Pennsylvania, Ohio Michigan and Wisconsin—five of this year’s 10 most closely contested states.

No clues as to who is right here, and that carries us to the end of Allen's first page. Pages two and three of the article are pure stenography--summaries of the "plan."

Now let's go back to paragraphs eight and nine...

Now I carry much of the federal budget around in my head 25/8. And the first of my bookmarks is to Peter Orszag and company's summary "The Budget and Economic Outlook: Fiscal Years 2008 to 2018" http://www.cbo.gov/ftpdocs/89xx/doc8917/01-23-2008_BudgetOutlook.pdf. I know that the CBO baseline projects (assuming spending subject to appropriations growing at the same pace as the economy) the federal goverment spending $3.7T (nominal) on our behalf in 2013--20.2% of GDP in an $18T (nominal), $12,000 per capita. I know that Jason Furman's $443 extension baseline deficit is based on a lowballed forecast of spending subject to appropriations: assuming spending subject to appropriations growing at the same pace as the economy and assuming extension of the Bush tax cuts and of standard one-year tax system patches produces a projected deficit of $580B--3.3% of GDP--and a projected on-budget deficit of $820B--4.5% of GDP, $2,600 per capita--once one recognizes that borrowings from the Social Security Trust Fund do have to be paid back. I know that spending on domestic uses that is allocated by annual appropriations--the park service, the courts, et cetera--peaked at 4.8% of GDP in 1978, was cut to 3.4% of GDP by 2002, was cut to 3.1% of GDP by 2000, and has risen since then to 3.5% of GDP. I know that McCain's defense policy rhetoric is not consistent with defense spending growing more slowly than the economy as a whole. I know that cutting more from spending subject to appropriations has proven impossible both politically and substantively: Americans like and expect federal support for education, their interstate highways, veterans' benefits, their FBI, their courts, TANF, the EPA, the national parks, NASA, et cetera.

In short, I am much more than a "discerning reader." I know a lot of things that tell me that Jason Furman has (a) constructed a scenario that is relatively favorable to the Bushies McCainites, (b) allowed the McCainites to count the Social Security Trust Fund surplus as current tax money to be spent rather than as a fund to be saved in a lockbox to pay for future Social Security deficits, and (c) even so the cuts in spending needed to hit McCain's target are politically impossible and substantively unwise. But I knew this before I started reading Allen.

What would a "discerning reader" who doesn't have CBO's current-law and alternative baselines:

http://www.cbo.gov/ftpdocs/89xx/doc8917/01-23-OutlookSlides.pdf

engraved on their brain make of these two paragraphs? Such a discerning reader would note that:

  • Jason Furman throws numbers around with facility and ease...
  • What these numbers mean is unclear, but there sure are a lot of them...
  • Jason Furman is not a neutral arbiter here: he is Barack Obama's economic policy director...
  • Nevertheless, Mike Allen pushes Jason onstage and gives him the microphone: Mike does not offer an alternative rebuttal quote from some "fiscal conservative" "excited" about McCain's plans to balance the budget...

Such a "discerning reader" might reason as follows: "that Mike Allen gives Barack Obama's economic policy director a large, unrebutted, my-eyes-glaze-over two-paragraph quote reasonably high up in an article about McCain tells me that Allen wants me to think that the McCain campaign is bulls---ting me." And I do, in fact, think that that is how Mike Allen hopes his discerning readers will reason.

But how many "discerning readers" are there? How many of those who read Mike Allen's stuff have ears sensitive enough to pick up the message of this dog-whistle journalism? I guarantee you that McCain's spinmasters this morning are happy with Mike Allen's article--have probably boxed up and sent him a new pair of kneepads--because they think the number of readers who pick up the dog-whistle journalism is very small, and that the takeaway for the overwhelming number of eyeballs that see the article is the headline: "McCain promises to balance budget."

I should note that Jason Furman likes and respects Mike Allen. As Jason wrote me in an email back in 2005:

Mike Allen is a great reporter and a very smart guy. If anything, he's more willing to "make the call" than a lot of other reporters. For years I've been frustrated when budget reporters write "pox on your houses" stories. [Allen is] one of the rare exceptions...

From my perspective, the bar is low.


UPDATE: I am reminded that P. O'Neill had something smart to say about Mike Allen:

There is another defence of Allen, not specifically related to the econ stories. He broke the Schiavo Republican talking points story, and had to endure two week of getting trashed by Powerline, Michelle Malkin, and Mickey Kaus, and even when he was proven right they still trashed him. He managed to stick to his line but it's dissipating to be up against the War on Facts crowd all the time. Probably contributes to a bit of gun-shyness on other stories...

Here is the execrable Mickey Kaus trashing Allen, yet another reason that friends don't let friends read Slate:

Mickey Kaus: March 30, 2005: Blogging in Print: According to de facto MSM Damage Controller Howie Kurtz, WaPo's Mike Allen is apparently now admitting what has been obvious to everyone else who has followed the controversy over those alleged "GOP Talking Points": the Post's stories were not entirely "accurate and carefully worded" (Kurtz's words), nor is it true that Allen "stuck to what we knew to be true and did not call them talking points or a Republican memo." Instead, he let an early version of his story ship out containing the unsupported claim that the memo was "distributed to Republican senators by party leaders."... Obviously at some point Allen thought or assumed the memo was a GOP leadership document, and before he'd nailed that down he temporarily let his scooplust get the better of him. This is a perfectly forgivable mistake. At least I hope it is--I make it all the time. You get all excited thinking you have a great story and then when you think more about it you realize you have a not-quite-as-great story, so you go back and make it "carefully worded"!...

Here is Allen's final word on the Schiavo memo:

washingtonpost.com: Counsel to GOP Senator Wrote Memo On Schiavo: The legal counsel to Sen. Mel Martinez (R-Fla.) admitted yesterday that he was the author of a memo citing the political advantage to Republicans of intervening in the case of Terri Schiavo, the senator said in an interview last night. Brian H. Darling, 39, a former lobbyist for the Alexander Strategy Group on gun rights and other issues, offered his resignation and it was immediately accepted, Martinez said. Martinez, the GOP's Senate point man on the issue, said he earlier had been assured by aides that his office had nothing to do with producing the memo.... The mystery of the memo's origin had roiled the Capitol, with Republicans accusing Democrats of concocting the document as a dirty trick, and Democrats accusing Republicans of trying to duck responsibility for exploiting the dying days of an incapacitated woman.... The document was provided to ABC News on March 18 and to The Post on March 19.... At the time, other Senate Republican aides claimed to be familiar with the memo but declined to discuss it on the record and gave no information about its origin...

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