April 12, 2011

In Reports on March Deficit, Wire Services ‘Forget’ to Tell Readers Spending Reached All-Time Highs

In a business that is supposed to treat record achievements, dubious or otherwise, as news, it’s more than a little curious to note that the Associated Press’s Martin Crutsinger, along with Reuters and AFP, all “somehow” forgot to tell readers that March’s reported federal outlays, as seen in the Monthly Treasury Statement released today, came in at an all-time record of $339.047 billion, and that this year’s spending through six months of $1.849 trillion — also an all-time record — is 3.5% higher than last year’s comparable figure of $1.786 trillion ($1.671 trillion plus a non-cash credit of $115 billion explained here last year).

This year’s six-month spending total annualizes out to $3.7 trillion, and amount that is almost $1 trillion, or 36%, higher than fiscal 2007. Though spending is the self-evident real problem, frontline reporters and their bosses would apparently prefer that news consumers not see how ugly those numbers really are.

Reuters and AFP can cop out to an extent by claiming that their reports were short. Crutsinger, who used about 575 words in his dispatch, has no such excuse. Here are selected paragraphs from his rendition, indicating that he preferred to relay days-old shutdown-prevention news over fully informing readers of the Monthly Treasury Statement’s contents:

… The Treasury Department reported Tuesday that the deficit already totals $829.4 billion through the first six months of the budget year – a figure that until 2009 would have been the biggest ever for an entire year. For March alone, the government ran a deficit of $188 billion.

President Barack Obama and congressional Republicans averted a government shutdown last week by agreeing to the largest-ever spending cuts for a single year. But David Wyss, chief economist at Standard & Poor’s in New York, said those cuts amount to a “rounding error” in this year’s deficit.

The cuts include unspent money from the 2010 census, which is completed, and $2.5 billion from the most recent repeal of highway programs that can’t be spent because of restrictions set by other legislation. They also include $3.5 billion in unused bonuses for states that enroll more children in a health care program for lower-income families.

Wyss expects the deficit will surpass the record of $1.41 trillion hit in 2009. The nonpartisan Congressional Budget Office raised its estimate earlier this year from $1.1 trillion to $1.5 trillion. A tax-cut package negotiated in December by Obama and Republicans, which includes a one-year reduction in the Social Security payroll tax, prompted the CBO to raise its estimate.

Sure Marty, it’s all the fault of that “tax-cut package.” Give me a break. Though it did reduce Social Security taxes by two percentage points for this year only, the legislation negotiated in December did not cut federal income tax rates at all. Instead, it avoided avoided tax increases which everyone with a brain agreed would do damage to the historically weak recovery from the recession that ended in June 2009.

Crutsinger also “somehow” forgot that the pile of refuse known at the White House’s February budget projected a fiscal 2011 deficit of $1.645 trillion.

It’s really easy to forget that spending levels should be going down, partially because the economy is sort-of recovering, but far more importantly because the 2009-2010 disaster known as the “stimulus,” which by itself was supposed to have inflated spending by $400 billion in both fiscals years, is basically over. Notice that spending has not only not gone down, it has increased, showing that the “stimulus,” regardless of its alleged intentions, ended up being more about increasing the spending baseline than it was about bringing about an economic recovery.

President Obama, as noted yesterday (at NewsBusters; at BizzyBlog) has decided to recast himself as a born-again deficit-cutter after two months of deliberately sitting on the sidelines with a budget proposal that was absurd on its face on the mid-February day it was issued. His current solutions, predictably, include a trillion-dollar dose of tax increases.

The wire services’ collective failures to report record spending levels plays right into the administration’s desire to put tax increases back on the table. How convenient.

Cross-posted at NewsBusters.org.

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BizzyBlog Update: In the interest of space at NB, I didn’t go after the following statement by Crutsinger — “Wyss expects the deficit will surpass the record of $1.41 trillion hit in 2009.” That is true of the reported deficit, but emphatically not true of the cash spending deficit, because of the $115 billion non-cash accounting adjustment noted in the body of the post above.

Specifically the cash spending and deficits, as seen in the graphic at my February 16 Pajamas Media column, are as follows:

  • Fiscal 2008 (the last year mostly unaffected by the POR (Pelosi-Obama-Reid) Economy — Spending of $3.072 trillion, deficit of $455 billion
  • Fiscal 2009 — Spending of $3.407 trillion, deficit of $1.302 trillion
  • Fiscal 2010 — Spending of $3.571 trillion, deficit of $1.408 trillion
  • Fiscal 2011 (projected by the White House) — Spending of $3.819 trillion, deficit of $1.645 trillion

Real year-over-year outlays and year-over-year deficits have been increasing this adminstration began.

BizzyBlog Update 2: If spending continues at the $335 billion monthly average seen in February and March for the next six months, the year-end total will be $3.85 trillion.

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