As reported last week, the Office of Management and Budget distributed a press release on July 12 that severely underestimated the percentage of the decline in the 10-year federal budget surplus caused by the Bush tax cut, claiming it was "less than 15%" rather than the 38 percent shown by the OMB's own data. This was probably an honest mistake -- it appears that the OMB attributed its analysis of the reasons for the deficit in the current fiscal year to the wrong time frame.
However, rather than directly admitting its error, the OMB simply changed the release on its Web site, posting an altered version (Adobe PDF file) without any disclosure that the incorrect bullet point had been deleted.
Criticism of the original release from New York Times columnist Paul Krugman prompted Trent D. Duffy, the OMB's communications director, to write a letter to the editor dated July 31 that was published Saturday. In it, Duffy calls the mistake an "error" that was "retracted weeks ago when noticed." But when contacted by phone, Duffy said this retraction was given only to reporters who contacted OMB about the original release -- there has never been a formal published retraction. Moreover, Duffy told me that the release was not changed on the Web site until July 26, which was one day after a report from the Center on Budget and Policy Priorities (Adobe PDF file) criticized the error and only five days before Duffy's letter.
Duffy also claims that the release "assigned a true number to the wrong time frame" in his letter. The tax cut caused "a very small, less than 10 percent, effect on the change in our fiscal picture from 2001 to 2002," he writes, and this was "mistakenly applied" to the 10-year surplus rather than the 2001-2002 period in the original release. As I have pointed out, however, he fails to acknowledge in the letter that the original release stated that the tax cut was responsible for "less than 15%" of the change in the 2002-2011 surplus, rather than the correct figure of less than 10 percent stated in OMB's most recent report. When speaking with me, he admitted the mistake and said that 15 percent is an old, incorrect figure that he accidentally used.
The controversy intensified Tuesday when Krugman wrote about Duffy's letter and the altered release in his column. Paul Begala then brought up the issue on CNN's "Crossfire" that night, prompting a hilarious display from Robert Novak, his co-host. Though Novak claimed he had spoken with OMB, he displayed no understanding of the two different budgetary time frames at issue, or the fact that the 15 percent figure is incorrect even for 2002. Calling himself "a one-man truth squad," Novak defended the incorrect 15 percent figure, saying OMB "never retracted it" and attacking Begala for not scrutinizing Krugman's "lies."
"I know you hate to do reporting, but try it once in awhile," he taunted.
There may yet be a happy ending, however. Duffy told me at press time that by Thursday morning OMB will post a disclosure that the release has been altered on its Web site, so this carnival of errors and spin will hopefully soon be drawing to a close.[As of noon EST Thursday, OMB has added a disclosure to the release on its site that says "The initial press release posted in this space contained errors that have since been removed."]
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