May 13, 2007

How to Downplay Good Federal Budget News: Martin Crutsinger’s Miserable Reporting on Record Tax Receipts and the Falling Deficit

Perhaps you read this week that in April, the US Treasury reported all-time-record tax collections of $383.6 billion.

If you did, you didn’t read it in the dead-trees version of the New York Times. The Old Grey Lady did not deem Thursday afternoon’s news “fit to print” on Friday (requires free registration), even choosing not to carry the related Associated Press report that is the main topic of this post (even though the Time posted it online Thursday evening). A Times search on “April treasury” (not in quotes) shows no evidence of any other coverage since then, nor does Sunday’s Business home page.

The Washington Post also carried that AP story and nothing else (also searching on “April Treasury,” not in quotes).

So, unless you happened to read a brief report from MarketWatch (requires registration) or subscribe to the Wall Street Journal (requires subscription), odds are that anything you read or heard about April’s Monthly Treasury Statement came from the aforementioned AP report, written by good old Martin Crutsinger (some previous examples of Crutsinger’s demonstrated bias and ignorance are here, here, here, and here).

Crutsinger’s full report is here. Here are its relatively minor (I’m not kidding) shortcomings:

  • Readers would want to know what the old record for receipts was; it’s nowhere to be found. The old record was $331.8 billion in April 2001. If it ever happened, can you imagine a sports reporter covering the end of a mythical baseball player’s a 66-game hitting streak neglecting to tell readers that the old record was Joe Dimaggio’s 56?
  • Because Crutsinger chose not to tell us what the old record was, readers didn’t get to appreciate the magnitude of the new record, which shattered the old one by 15.6%.
  • Crutsinger waited until the final paragraph to note that the surplus for the month was $177.7 billion, and did not inform readers that it was the second-highest surplus ever (April 2001 had a higher surplus).
  • He did not report the White House’s reaction to the news until the second- and third-last paragraphs (paragraphs 13 and 14).
  • “Mr. Clever” Crutsinger knew that the final paragraphs were the ones readers were least likely to get to, and the ones most likely to be cut by subscribing newspapers and other users. Sure enough, this report, and this one, edited out the direct quote from Budget Director Rob Portman; this one, as well as the report at the popular My Way site, has neither paragraph of administration reaction; and shorter reports carried by TV station sites such as this one never got to the administration’s reaction or the amount of April surplus (and who at AP wrote the first paragraph at that link, which does not appear in Crutsinger’s original report: “The tax man is really raking it in”?).

As I noted, those are the minor flaws. Here’s the howler:

The federal budget was in surplus for four years from 1998 through 2001 as the long economic expansion helped push revenues higher. But the 2001 recession, the cost of fighting a global war on terror and the loss of revenue from President Bush’s tax cuts sent the budget back into the red starting in 2002.

If Martin Crutsinger was going to blame the $125 billion in tax cuts ($73.8 billion and $51.2 billion) made in 2001 and 2002 for contributing to the deficits (and though they stimulated the economy to an extent, a case can be made that they did not increase overall revenues), he needed to explain, and of course failed to explain, why tax receipts have gone up so much in the past three years, as seen here:

Revs0503thru0407

Instead, Crutsinger dryly told us that “revenues” are up 11.2% so far during the current fiscal year (aside: Businesses earn “revenues,” Martin; governments collect taxes and fees). He made no attempt to explain how it could possibly be that tax receipts have increased over $760 billion, and at double-digits rates for several years, while the economy has grown at a rate of just a bit over 3% during that time.

Anything, I suppose, so that Mr. Crutsinger could avoid writing these “horrible” words: “The investment-related Bush tax cuts of 2003 have caused tax collections to increase dramatically. So far this year, those cuts primarily explain why the deficit is 56% lower than it was at this time last year.”

Some economists, including The Skeptical Optimist, believe that the budget will be (more correctly – is on track to be — Ed.) in balance as early as April 2008. You have to wonder how Crutsinger will try to keep that news away from his readers if that day comes.

Cross-posted at NewsBusters.org.

______________________________

UPDATE: And how about this? The deficit during the four April-ending 12-month periods charted above has dropped about 68% — from $456 billion in the 12 months ended April 2004 to $145 billion in the 12 months just ended. Oh, for a modicum of spending restraint to go with the revenue gusher.

UPDATE 2: Dan Clifton at ASA’s blog has more.

UPDATE 3: Welcome to Instapundit readers!

UPDATE 4: I should really add that those 2003 investment-related tax cuts that REALLY juiced federal receipts amounted all of $60.8 billion on a static-analysis (i.e., stupid analysis) basis.

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11 Comments

  1. [...] Bizzyblog reports on systematic misreporting of economic news in the MSM. Specifically, he points out attempts to obscure the fact that federal tax revenues have risen much faster than predicted and that the budget deficit has declined significantly as a result. Some economists are predicting that the budget will be in balance by Spring of 2008. [here] [...]

    Pingback by Bush’s Economic Miracle | PAWaterCooler.com — May 14, 2007 @ 12:20 am

  2. I have said it before, maybe here, that this Admin. has done a terrible job playing up this issue. The tax cuts proved to be a very good policy.

    Comment by Ben Keeler — May 14, 2007 @ 1:07 am

  3. I feel like it is kinda like the old Peanuts cartoon. Charlie Brown streaks up to the ball, only to have Lucy yank it away at the last second. Only in this case, they also move the goal posts about 50 yards laterally, and simultaneously rule that fieldgoals are *completely* illegal. Oh!… and the press– supposedly covering the game– lauds the opposing team for it’s “brazen ingenuity” and naked willingness to cheat. Afterall, it’s not how you play the game, but your willingness to win at all costs!

    Comment by Mike — May 14, 2007 @ 1:58 am

  4. #3, I would add that much of the press is playing for the opposing team.

    Comment by TBlumer — May 14, 2007 @ 6:08 am

  5. [...] Read more here as well as Glenn Reynolds who makes an interesting comparison here. [...]

    Pingback by Bob Krumm » What’s bad for Wal-Mart is good for the government — May 14, 2007 @ 7:30 am

  6. Bizzyblog notes that:

    “Some economists, including The Skeptical Optimist, believe that the budget will be (more correctly – is on track to be — Ed.) in balance as early as April 2008.”

    …and asks:

    “…how Crutsinger will try to keep that news away from his readers if that day comes.”

    Not a problem.

    The news will be overlooked until President Rodham Clinton takes the oath of office on 20 Jan, 2009.

    On the morning of 21 January, the New York Times will report that La Clinton not only danced every dance at the every Inaugural Ball (she led, they followed), but also balanced the budget on her first day in office.

    And so History shall record it.

    Comment by john legere — May 14, 2007 @ 7:48 am

  7. [...] I think it’s the Martin Crutsinger approach to economic reporting. [...]

    Pingback by WetWorx » Blog Archive » If you can’t get them one way, do it the opposite way. — May 14, 2007 @ 9:23 am

  8. “..this Admin. has done a terrible job playing up this issue.”

    Is that really true? I know the conventional wisdom holds that this Admin is inept at public relations; but if the Press is actively working against them, should the Admin really be blamed for not getting the message out?

    I’m willing to believe this Admin is inept at P.R., but I just don’t know what to believe anymore.

    Comment by Les Nessman — May 14, 2007 @ 10:17 am

  9. [...] BizzyBlog notes that the AP is trying to bury the lede on April’s Treasury Department report showing surging government revenues. The Treasury Department recorded record tax collections of $383.6 billion, which smashes previous revenue records by over 15%. The hard evidence shows that the supply-side view that decreasing marginal tax rates increase revenues is being vindicated and some have predicted that the federal deficit could be gone by next year. [...]

    Pingback by Jay Reding.com - Cutting Taxes, Cutting The Deficit — May 14, 2007 @ 10:29 am

  10. Les makes a good point. Indeed, we see it in the AP article; the administration’s comments on its own good performance are buried at the end of the article (and I’ll bet ten bucks that Crutsinger mangled the quote so it seems as unoptimistic as possible.)

    Comment by DensityDuck — May 14, 2007 @ 10:15 pm

  11. #8 and #10, I agree that the Admin hasn’t done a very good job. What is frustrating is that the previous Admin didn’t have to do much of a job at all, the at-the-time Mainstream Media did it for them, and the White House just had to say “See?”

    Comment by TBlumer — May 14, 2007 @ 10:25 pm

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