Ignore, ignore, ignore

White House staffers underestimated the cost of the Bush tax cut. Why can't they just admit it?

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Mitch Daniels, the former political operative and pharmaceutical executive who now serves as director of the Office of Management and Budget in the Bush White House, has quickly made himself and his agency notorious in Washington for irresponsible attempts to deceive and manipulate. In the latest saga, an incorrect claim by OMB about the cost of the Bush tax cut has simply been erased from history.

As the Center on Budget and Policy Priorities and New York Times columnist Paul Krugman have pointed out, a July 12 press release from OMB contained a major factual error.

The release was a preview of an OMB report called the Mid-Session Budget Review, which showed a projected federal budget deficit of $165 billion for fiscal year 2002 and a decline in the estimated 2002-2011 surplus from $5.6 trillion at its peak to $1.7 trillion today. In the third bullet point of the press release, OMB attributed figures pertaining to the 2002 budget to the wrong surplus estimate, claiming that “the recession erased two-thirds of the projected ten-year surplus (FY2002-2011)” and that the tax cut “generated less than 15% of the change.”

The OMB’s data itself, however, shows that those figures are incorrect. As CBPP points out, “Data in the mid-session review shows that the tax cut actually accounts for 38 percent of the deterioration” from the $5.6 trillion 10-year surplus projection in February 2001.



The administration is fully aware that the press release was incorrect. The Council of Economic Advisors chairman, Glenn Hubbard, was even directly questioned about it during a Joint Economic Committee hearing on July 17. He admitted that 40 percent sounds “about right” for the portion of the decline in the 10-year surplus attributable to the tax cut, not 15 percent.

Rather than issue a correction, however, OMB has shamelessly slipped an altered version of the release onto its Web site in place of the original. There is absolutely no indication that it has been changed — the offending bullet point is simply gone.

The error in the original release may have been inadvertent, but why can’t OMB just admit its mistake and openly correct the record?

Brendan Nyhan is a political scientist currently serving as a RWJ Scholar in Health Policy Research at the University of Michigan.

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