Media outlets report on strength of Bush economy, ignore earlier reports that deficit numbers were inflated

››› ››› ROB DIETZ

Few media reports on new, lower federal budget deficit projections by the Bush administration pointed out that critics have accused the administration of inflating its original deficit predictions to be able to later tout the actual, less dire, figures.

Reports on the July 11 editions of the CBS Evening News and ABC's World News Tonight uncritically touted Bush administration claims that its new federal deficit projections at $296 billion represented "encouraging news about [the] federal budget." Other media outlets included some criticism of Bush's handling of the economy, but few noted that critics have accused the administration of inflating its original deficit predictions to be able to later tout the actual, less dire, figures. The Washington Post, The New York Times, the Los Angeles Times, and The Wall Street Journal all failed to mention this reported pattern in stories about the announcement in which Bush touted the economic numbers. By contrast, on the July 11 edition of NBC Nightly News, anchor Brian Williams reported that "many economists and administration critics say the White House has deliberately inflated its own deficit projections in the past few years to score political points when the actual numbers came in lower."

In an "official 'midsession review,' " President Bush announced on July 11 that the budget deficit was projected to be $296 billion, down from $318 billion in 2005, and a significant decrease from the January 2006 projection of $423 billion. Bush claimed that the lower projection was due to increased revenue resulting from his tax cuts. "So the tax cuts we passed have helped this company [the Wisconsin shoe factory where Bush was speaking]. It made a lot of sense. They've also helped our country. This economy of ours is growing."

A July 12 Post article by staff writer Paul Blustein stated the report was "a figure that prompted the White House to claim vindication for its tax cuts, and Democrats to issue new denunciations of the nation's fiscal problems." But the Post never mentioned its own January 13 article that identified this alleged pattern on the part of the administration to inflate its January budget deficit estimate. As Media Matters for America noted, Post staff writer Jonathan Weisman reported that the White House routinely issues inflated deficit projections then boasts when the actual numbers are below their estimates:

This is the third straight year in which the White House has summoned reporters well ahead of the official budget release to project a higher-than-anticipated deficit. In the past two years, when final deficit figures have come in at record or near-record levels, White House officials have boasted that they had made progress, since the final numbers were below estimates.

"This administration has a history of overestimating the deficit early in the year, lowering expectations, then taking credit when it comes in below forecast," said Stanley E. Collender, a federal budget expert at Financial Dynamics Business Communications. "It's not just a history. It's almost an obsession."

Indeed, the dire new forecast came the same day that Treasury Department officials were touting a very different picture: The federal government posted the first budget surplus for December in three years, buoyed by a rush of corporate tax payments that more than offset record spending. On Jan. 6, the nonpartisan Congressional Budget Office reported that the deficit for the first three months of the fiscal year was about $119 billion, almost exactly where it stood for the first quarter of fiscal 2005.

A July 12 New York Times analysis by Sheryl Gay Stolberg said Bush has been "blessed with a growing economy" even though "some economists say that the picture is not all that rosy." And a July 12 Times report by Edmund L. Andrews noted that "budget analysts warned that the long-term fiscal outlook remained almost as bleak as before." But neither Stolberg nor Andrews mentioned the pattern noted by NBC and previously identified by the Post.

The Los Angeles Times also failed to note the claims that the administration has a history of inflated projections. In a July 12 article by Joel Havemann, the Los Angeles Times reported that "[m]ost Democrats were unimpressed. Rep. John M. Spratt Jr. of South Carolina, the top Democrat on the House Budget Committee, said that when Bush came into office in January 2001, the official White House budget projection showed a $305-billion surplus. So the new projected deficit of $296 billion represents a swing of $600 billion, Spratt said." Havemann had even written about the Bush administration's reported pattern in an article published the morning of Bush's announcement, but his July 12 article did not mention it:

But the apparent good news will not strike some economists as surprising: This will be the third year in a row that the administration put forth relatively gloomy deficit forecasts early on, only to announce months later that things had turned out better than expected. To some skeptics, it's beginning to look like an economic version of the old "expectations" game.

The Journal reported (subscription required) on July 12 that "[t]he revised deficit figure is much rosier than the White House and the Congressional Budget Office projected in February," but it didn't report on similar disparities between projections and revisions in previous years:

Fiscal year

2004

2005

2006

January projection

$521 billion

$427 billion

$423 billion

Actual deficit

$413 billion

$318 billion

$296 billion (projected)

By contrast, July 12 reports by USA Today, the Associated Press and McClatchy Newspapers joined NBC Nightly News in reporting the administration's pattern:

  • USA Today quoted Senate Democratic Leader Harry Reid (NV) as saying that "Bush 'has played the old expectations game' by using gloomy deficit forecasts three years in a row. South Carolina Rep. John Spratt, top Democrat on the House Budget Committee, said the administration 'is claiming credit for bringing the deficit down, without acknowledging that its policies have driven the deficit up.' "
  • From the AP: "The Bush White House has gained a reputation for overstating deficit figures early in the year in order to report better news later. Indeed, if recent patterns hold, this year's deficit should improve even more by the time final figures are announced in October."
  • An article by McClatchy stated that the Democrats "pooh-poohed" the excitement about the numbers and reported that "Democratic members of Congress said that the February projection had been deliberately inflated to make the revised figures look good. 'They overstated the deficit on the front end to claim success later in the year,' Sen. Kent Conrad of North Dakota, the senior Democrat on the Senate Budget Committee, told reporters at the Capitol."

From the July 11 edition of the CBS Evening News:

BOB SCHIEFFER (anchor): It's a rule of Washington: When the news is good, the highest-ranking official announces it. So today the president himself announced that the federal deficit this year will total $296 billion, that is 30 percent lower than he predicted back in February. He gave the credit to his tax cuts, saying they stimulated the economy and boosted the amount of money coming into the treasury.

From the July 11 edition of ABC's World News Tonight:

KATE SNOW (ABC White House correspondent): There's encouraging news about federal budget tonight. The Bush Administration said that this year's deficit will be $296 billion, much smaller than the $423 billion shortfall it forecast six months ago. President Bush said the improvement is the result of strong economic growth, which led to an unexpected surge in tax payments by corporations and wealthy Americans.

From the July 11 edition of NBC's Nightly News:

WILLIAMS: Also on the economy now, President Bush today presided over an event designed to trumpet the administration's so-called midsession budget review. This is a duty that normally falls to a lower-level budget official and not the president, but the administration wanted to highlight new numbers showing that the budget deficit is going down. Last year's deficit was $318 billion. And last year, the White House predicted this year's deficit would be $423 billion. Now, according to today's projections, this year's deficit will come in, in fact, they say at $296 billion, mostly because of increased tax revenue from corporations and wealthy Americans. Now, many economists and administration critics say the White House has deliberately inflated its own deficit projections in the past few years to score political points when the actual numbers came in lower.

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