Bush Team's Fuzzy Math
In a presidential debate nearly four years ago, George W. Bush accused Al Gore of employing "fuzzy math." But increasingly, it's the White House that's being accused of numerical fuzziness on Medicare, the deficit and jobs.
President Bush last year signed a Medicare prescription drug benefit with an estimated price tag of $395 billion. A month later, the White House said the actual cost was more like $534 billion.
In his State of the Union address, the president pledged to halve the deficit by 2009. But his plan largely excludes the cost of operations in Iraq and Afghanistan and does not reflect the long-term impact of Mr. Bush's proposal to make recent tax cuts permanent.
And most recently, White House officials backed off a projection in the president's annual economic report that the U.S. economy would generate 2.6 million new jobs this year.
There's often debate in Washington over numbers, and past administrations have also been accused of fudging it. But the Bush team's math seems unusually sloppy to some long-time observers.
"I have to say, the budget gimmicks this year are so transparent and so obvious, I think they stunned even Republicans," said Robert Bixby, executive director of the Concord Coalition, a nonpartisan group that advocates fiscal responsibility.
"Usually you have to dig a little bit deeper to find sort of subtle gimmicks," he said. "There's nothing subtle about these: They just decided to leave a lot of big items out."
Numbers have always been key to Mr. Bush's image. He lost the 2000 popular vote by 540,000 votes, but won Florida by 537 ballots. He based his case for war in Iraq partly on 25,000 liters of anthrax for which Iraq allegedly failed to account; they haven't been found.
Now, Democrats may try to use these troublesome numbers to undermine the president's credibility:
Last summer, Mr. Bush said he'd budgeted for $400 billion to improve Medicare. In the fall, Congress passed a bill that the Congressional Budget Office estimated would cost $395 billion over ten years.
Mr. Bush signed the bill in December, never mentioning its cost. Last month, the White House Office of Management released budget documents that estimated the bill's cost actually would be 35 percent higher than CBO predicted: $534 billion over ten years.
"You have to keep in mind that these are estimates of something that is very difficult to estimate," said White House spokesman Scott McClellan. He said the White House only recently learned the new numbers. Asked if the drug benefit could end up costing even more than $534 billion, he said, "You're absolutely right." He also noted, "It could be less expensive."
CBO and the White House agree that the difference between their projections is due to what OMB calls "assumptions regarding beneficiary participation, market behavior, and cost growth rates."
Indeed, the Medicare bill is "really is a leap into the unknown," Bixby said, "because they are creating a major new program and major new idea. …There's an unusual amount of uncertainty in an already uncertain process."
The White House is predicting a $521 billion deficit in fiscal 2004. But the president said in his State of the Union address that if Congress were to "focus on priorities, cut wasteful spending, and be wise with the people's money" the federal government could "cut the deficit in half over the next five years."
However, the president's deficit-reduction plan disregards several major costs, like the war in Iraq, rebuilding Afghanistan, and future tax cuts.
"I don't see how you can leave those things out of the budget and say you have a plan," said Bixby. "That plan assumes those expenses aren't going to be incurred, and they are."
Last year, the administration sought two supplemental spending bills for Iraq and Afghanistan, for roughly $79 billion and $87 billion each. But the Pentagon's financial chief, Dov Zakheim, said the administration wants to wait until 2005 to ask for another infusion of cash because "there are just so many uncertainties and variables between now and then."
Taxes are another great uncertainty, at least in the president's budget. Mr. Bush said this week that he wants to make permanent the tax cuts in his 2001 and 2003 tax bills — including the child tax credit, dividends tax relief, and estate tax phase-out — which are set to roll back or expire in coming years.
The president's budget acknowledges the cost of those cuts in its statistical tables. But Mr. Bush's deficit-reduction plan focuses only on the next five years, not the longer-term period when most of those additional tax cuts will kick in.
CBO estimates that extending all of those cuts would reduce federal revenue by $1.8 trillion over the 2005-2014 period. That doesn't include the cost of reforming the Alternative Minimum Tax, which is hitting an unintended number of middle-class taxpayers and may take $376 billion over ten years to fix.
"I think the administration has been extremely loose with its use of information throughout its tenure and I think they have largely gotten a free ride on it," said Isaac Shapiro, senior fellow at the Center for Budget and Policy Priorities.
"The loose approach that they've used towards forecasting in recognizing the reality of the deficit is now coming back to haunt them," said Shapiro.
Shapiro's organization even wonders if the president is overstating this year's deficit to make substantial future deficits look smaller by comparison. Congressional analysts are predicting a shortfall of only $477 billion.
On page 98 of this year's Economic Report of the President, a chart indicates that the administration is projecting 132.7 million jobs by the end of 2004. That would be an increase of 2.6 million jobs over the current level.
The White House did not trumpet the 2.6-million figure or try to claim credit for jobs that do not yet exist. But when Democrats seized upon it, White House officials began backing away from the claim last week. First Treasury Secretary John Snow hedged his bets. Then McClellan told reporters, "The president has said he is not a statistician."
When asked about the figure, Mr. Bush said he was encouraged by the 366,000 jobs created over the past five months. But that recent job creation averages to a mere 73,000 jobs a month; the number predicted in the economic report requires better than 216,000 new jobs a month.
The Bush White House has been wrong on this number before: Its estimates of the total number of jobs by year's end overshot the eventual figure by 2.4 million last year and 1.8 million the year before.
In 2001, President Clinton overshot by 1.5 million jobs. The Clinton administration under-predicted the jobs number by an average of 1.4 million jobs every year from 1996-2000
The 2.6 million-job figure reflects "the amount of job growth that has usually occurred during recoveries," Shapiro said. The problem is that despite two years of recovery, no such job growth is in sight.
"It's that contrast that finally began to make them nervous," he said.
By Jarrett Murphy