On Backbone Radio, Ambrose misled on Bush tax cuts, wages, recession

During a broadcast of KNUS 710-AM's Backbone Radio, Independence Institute senior fellow Jay Ambrose made several misleading comments about President Bush's tax cuts, wages, and the recent economic recession.

On the November 12 broadcast of KNUS 710-AM's Backbone Radio, hosted by former Republican state senate president John Andrews, Independence Institute senior fellow Jay Ambrose incorrectly stated with regard to the Bush tax cuts that “the top 1 percent, the top 5 percent, the top 10 percent of income tax payers are paying more now than they paid before.” Ambrose also misleadingly stated, apparently as a rebuttal to observations that wages in the Bush years have stagnated, “Actually household incomes have been going up pretty dramatically.” Further, Ambrose -- former editor of the Rocky Mountain News and a member of the National Conference of Editorial Writers -- mischaracterized the recent economic recession as one “that began in the Clinton years.”

Ambrose made his comments about the Bush tax cuts in response to Andrews's question “about what might be ahead in the new Democrat [sic] Congress.”

From the November 12 broadcast of KNUS 710-AM's Backbone Radio:

ANDREWS: Jay Ambrose, your thoughts about what might be ahead in the new Democrat Congress.

AMBROSE: Well, you got opposition to free trade -- that'll hurt the economy. That'll set us back. If they can actually be successful at that, and they might be able to throw some wrenches in the works. You have some people who are not going to support a sustained tax cut. It's a tax cut that has given us the highest revenues in the federal budget ever in history. People don't seem to know that. It's a tax cut that lifted the economy after 9-11, after high oil prices, after a recession that began in the Clinton years. It's a tax cut that they like to say is for the rich, and yet the top 1 percent, the top 5 percent, the top 10 percent of income tax payers are paying more now than they paid before. And it's a tax cut that has simply benefited all Americans. The early, early tax cuts were equivalent for a married couple with two children of a 4 percent raise after taxes. I mean, it's pretty extraordinary. People talk about stagnant wages. Actually, household incomes have been going up pretty dramatically. But the people who talk about stagnant wages -- well, the tax was a plus there. They're gonna -- they're gonna -- they're not going to extend those tax cuts.

In fact, the nonpartisan Congressional Budget Office released a study in August 2004 that projected effective individual income tax rates based on 2001 incomes and showed a decline in tax rates for the highest income households. The study showed that households with incomes in the top 1 percent would see their effective individual income tax rate in 2006 fall 3.2 percent under the Bush tax cuts, compared with what it would have been under pre-existing tax law. The corresponding figure for the top 5 percent of incomes is a drop of 2.3 percent, and for the top 10 percent of incomes, a drop of 2.0 percent.

Furthermore, while the latest report from the U.S. Census Bureau -- issued in August -- does indeed show that real household incomes rose 1.1 percent in 2005 compared with 2004, the same report showed that real median earnings for full-time workers declined during the same time period. The report also provides statistics indicating that "[t]he last time median income of households experienced an annual increase was 1999."

Contrary to Ambrose's suggestion that Bush's economic policies have led to higher wages, the Census Bureau reported:

The real median earnings of both men and women who worked full-time, year-round declined between 2004 and 2005 ... The median earnings of men declined 1.8 percent to $41,386. The median earnings of women declined 1.3 percent to $31,858.

And contrary to Ambrose's suggestion that the recent economic recession “began in the Clinton years,” the National Bureau of Economic Research (NBER) -- the private, nonpartisan organization whose business cycle announcements have long been considered the definitive word on the dating of economic recessions and expansions -- determined that the U.S. economy went into recession for the first time in 10 years in March of 2001 -- after Clinton had left office. As Media Matters for America has noted, NBER's president, Martin Feldstein, was a Bush campaign adviser. According to the NBER's November 26, 2001, report, “The Business-Cycle Peak of March 2001” :

The NBER's Business Cycle Dating Committee has determined that a peak in business activity occurred in the U.S. economy in March 2001. A peak marks the end of an expansion and the beginning of a recession. The determination of a peak date in March is thus a determination that the expansion that began in March 1991 ended in March 2001 and a recession began. The expansion lasted exactly 10 years, the longest in the NBER's chronology.