Media reports on CBO's initial "analysis" of economic recovery plan falsely claimed it analyzed the entire package
In numerous instances, the media have falsely stated or suggested that a CBO analysis of less than half of the economic recovery bill examined the entire bill, resulting in the false suggestion that the analysis, in the words of the Politico, "shows very little money will be spent in the first six or so months after enactment" of the recovery plan. But as the AP noted, the CBO analysis did not "cover tax cuts or efforts by Democrats to provide relief to cash-strapped state governments to help with their Medicaid bills." Six days later, some outlets were still making the false suggestion.
During the debate over the House of Representatives' version of the economic recovery bill, the media have in numerous instances falsely stated or suggested that a Congressional Budget Office (CBO) analysis of less than half of the plan -- first reported in a January 20 Associated Press article -- examined the entire bill, and, thus falsely and often explicitly making the claim that, as the Politico said, the CBO analysis "shows very little money will be spent in the first six or so months after enactment" of the recovery plan.
In fact, as the initial AP report noted, the CBO analysis did not take into account all aspects of the recovery plan -- while it found that "only $26 billion out of $274 billion in infrastructure spending would be delivered into the economy by the Sept. 30 end of the budget year," it did not "cover tax cuts or efforts by Democrats to provide relief to cash-strapped state governments to help with their Medicaid bills," among other provisions. Nonetheless, in echoing aspects of the AP's original report about the CBO analysis, numerous media figures and outlets left out the fact, reported by the AP, that CBO analyzed only part of the bill.
As the Huffington Post's Ryan Grim reported in a January 23 article: "[T]he nonpartisan CBO ran a small portion of an earlier version of the stimulus plan through a computer program that uses a standard formula to determine a score -- how quickly money will be spent. The score only dealt with the part of the stimulus headed for the Appropriations Committee and left out the parts bound for the Ways and Means or Energy and Commerce Committee." The article continued: "Because it dealt with just a part of the stimulus, it estimated the spending rate for only about $300 billion of the $825 billion plan. Significant changes have been made to the part of the bill the CBO looked at."
Because the analysis reportedly did not address the entire spending plan, it cannot be cited as authority for the claim that the CBO found that most of the package will not be spent for two years. As Media Matters for America has documented, in a January 22 letter, Office of Management and Budget (OMB) director Peter Orszag -- who formerly headed the CBO -- stated that the CBO "analysis, however, did not assess the overall package." He added: "Our analysis indicates that at least 75 percent of the overall package (including its tax component and the other spending provisions that were not analyzed by the Congressional Budget Office) will be spent over the next year and a half."
Indeed, a January 26 CBO "Cost Estimate" of H.R. 1, the entire recovery plan as introduced in the House of Representatives, found that 64 percent of the effects of the plan would be enacted by the end of the 2010 fiscal year: "Combining the spending and revenue effects of H.R. 1, CBO estimates that enacting the bill would increase federal budget deficits by $170 billion over the remaining months of fiscal year 2009, by $356 billion in 2010, by $174 billion in 2011, and by $816 billion over the 2009-2019 period." In a January 26 post on his blog, CBO director Douglas W. Elmendorf wrote of the report: "This is the first cost estimate that CBO has prepared for H.R. 1 in its entirety. A previous preliminary estimate that has been widely cited addressed only the budgetary impacts of an earlier version of the provisions contained in Division A, at the request of the House Committee on Appropriations."
The following timeline chronicles media outlets and figures that falsely stated or suggested the initial CBO report examined the entire economic recovery plan, as well as a sampling of the other reporting they ignored in doing so.
In a January 20 story posted on washingtonpost.com with the misleading headline "Much in Obama stimulus bill won't hit economy soon," the AP highlighted the CBO's partial analysis, reporting: "It will take years before an infrastructure spending program proposed by President-elect Barack Obama will boost the economy, according to congressional economists. The findings, released to lawmakers on Sunday, call into question the effectiveness of congressional Democrats' efforts to pump up the economy through old-fashioned public works projects like roads, bridges and repairs of public housing." The article continued: "Less than half of $30 billion in highway construction funds detailed by House Democrats would be released into the economy over the next four years, concludes the analysis by the Congressional Budget Office. Less than $4 billion in highway construction money would reach the economy by September 2010." In the article, the AP also reported that "[t]he CBO analysis doesn't cover tax cuts or efforts by Democrats to provide relief to cash-strapped state governments to help with their Medicaid bills" and that "other elements of Obama's $825 billion economic recovery plan, such as $275 billion worth of tax cuts to 95 percent of [tax] filers and a huge infusion of help for state governments, will be distributed into the economy more quickly."
While the AP did report that CBO analyzed only part of the bill, during Fox News' January 20 inaugural coverage, correspondent Carl Cameron falsely suggested that CBO had analyzed the entire bill and stated that it found "[o]nly seven percent -- about $20 billion -- will be spent this year" while "[t]he vast majority of it will not be spent until 2010, 2011, and 2012." From the Nexis news database:
CAMERON: On the economic stimulus, which is dominated the headlines and the agenda for the Democratic majority in Congress as well as the incoming Democratic president; there's a Congressional Budget Office report out today that suggests that the $825 billion stimulus proposal from Democrats, which is supposed to be timely and temporary, actually offers most of its spending a couple years from now. Only seven percent -- about $20 billion -- will be spent this year.
The vast majority of it will not be spent until 2010, 2011, and 2012. It is already raising questions with Republicans about whether or not Democrats are actually proposing a stimulus, or just more spending. Now there's a Congressional Budget Office report, a non-partisan report, that suggests that the spending will come in the out years, in the vernacular, not immediately.
While the Chicago Tribune reported that "Democrats said the analysis was incomplete because it excluded the fastest-acting elements of the stimulus bill, including tax cuts and increased unemployment benefits," and The Washington Post reported that "House Democrats and administration officials said that by leaving out the tax cuts and spending on the poor, the CBO report focuses on the slowest-spending parts of the proposal," several media outlets continued to falsely suggest that the analysis had examined the entire recovery plan:
- In a January 21 article, The New York Times reported that Sen. Jon Kyl (R-AZ) "chastised [Treasury Secretary Tim] Geithner for extolling Mr. Obama's proposed recovery plan, an $825 billion package of spending and tax cuts as drafted in the House. Mr. Kyl called the package 'indefensible,' adding to new criticism on Wednesday among lawmakers of both parties after the Congressional Budget Office reported that much of the spending would not occur until after 2010, suggesting the package would do little to jumpstart the economy."
- During the January 21 edition of CNN's Campbell Brown: No Bias, No Bull, senior political analyst Gloria Borger asserted, "Republicans were saying that the $825 billion stimulus package is not going to create enough jobs quickly enough." CNN contributor Stephen Hayes responded: "Well, that was a result of a Congressional Budget Office study that suggested that a lot of the spending was pushed too far back into 2010 and beyond even to have any real stimulative effect on the economy."
- During the January 21 edition of Fox News' Special Report, chief Washington correspondent Jim Angle reported: "House Republicans, armed with a new report showing the Democratic stimulus plan could take as long as 10 years to work its way into the economy, asked for a meeting tomorrow with the new president." Angle further reported: "The Democratic proposal sets aside 358 billion for new infrastructure projects. Even though Speaker Nancy Pelosi says such spending should be timely, temporary, and targeted, the CBO analysis found that the current bill is none of those things. It found, for instance, that of the 358 billion in new spending, only 26 billion would be spent by the end of this fiscal year, and another 110 billion, meaning a third of the total, by the end of 2010."
- On the January 21 broadcast of NBC's Nightly News, senior White House correspondent Chuck Todd reported that Obama "drew more criticism from Republicans today thanks to a new report claiming the stimulus will take years, not months, to improve the economy" and aired a clip of House Minority Leader John Boehner (R-OH) criticizing the stimulus plan by saying, "When it comes to slow-moving government spending programs, it's clear that doesn't create the jobs or preserve the jobs that need to happen."
Articles mentioning the initial CBO analysis by the AP, Bloomberg News, and The Wall Street Journal, among others, noted that Democrats had pointed out that the study had not examined the entire recovery plan. Nevertheless, media outlets and figures continued to misrepresent the extent of the CBO's findings.
- During the January 22 edition of Fox News' On the Record with Greta van Susteren, Fox News contributor Newt Gingrich asserted: "Look, the Congressional Budget Office has reported that less than 10 percent of the bill will be spent the first year. Some of it would not be spent for 10 years. This is a bill -- this is not a stimulus package, this is a bigger government, more bureaucracy, more powerful politician package in the guise of a stimulus."
- On the January 22 edition of Fox News' Your World, host Neil Cavuto asked Rep. Chris Van Hollen (D-MD): "Are you troubled, Congressman, when your own Congressional Budget Office says 1 out of $10 appropriated for this sort of stimulus is going to make its way into the economy in the next two years? That means 9 out of 10 are not."
- During the January 22 edition of CNN's The Situation Room, deputy editorial page editor of The Washington Times and CNN contributor Tara Wall stated: "I think between the Congressional Budget Office saying that, you know, all that money is not going to get out there -- less than 40 percent they're saying; in addition to, now, you know, Republicans saying the stimulus package isn't so stimulative and it's, you know, veering off further and further from what Obama originally said, I think that he -- the fact that he's going to have his daily briefing is probably mandatory in light of the dynamics that we're facing and the pushback that he's getting."
- In a January 22 article, The Washington Times uncritically reported that Republicans were "pointing to an analysis of the spending plan by the nonpartisan Congressional Budget Office predicting that more than 90 percent of the money would be spent after fiscal 2009, which ends Sept. 30."
A January 23 AP article reported that Senate Majority Leader Harry Reid (D-NV) "said there was 'significant discussion about the CBO numbers' at the White House meeting. He said Obama's budget director, Peter Orszag, who recently headed the CBO, told participants that the study analyzed only 40 percent of the pending stimulus bill and that 'he would guarantee that at least 75 percent of the bill would go directly into the economy within the first 18 months.' " Nonetheless:
- During the January 23 edition of Fox News' Your World, host Neil Cavuto asserted: "[T]he Congressional Budget Office has said much of the stimulus is back-loaded. By that, I mean the real bang for the buck comes in outer years, some two or three years out, and that 7 percent of it would be more immediate; 93 percent would not.
- On the January 23 edition of CNN's Lou Dobbs Tonight, White House correspondent Ed Henry referred to a "study" from the Congressional Budget Office that Henry claimed "showed" that Obama's economic stimulus package "may not really stimulate the economy." Henry later asserted that the study "was suggesting that a lot of the spending proposals in the original plan would not really take effect for a couple of years, so it wouldn't clearly help create jobs in the first two years of the president's administration."
Additionally, on the January 23 edition of MSNBC's Hardball, Rep. Brian Bilbray (R-CA) falsely asserted: "Even the Congressional Budget Office says half of this money will not stimulate the economy within two years." Host Chris Matthews did not challenge Bilbray's claim and instead stated: "But we've got a $10 trillion shortfall in terms of demand. Don't you have to have a big-sized stimulus package to even kick the economy?"
- The Washington Post reported on January 24 that "Ed Yardeni, president and chief investment strategist at Yardeni Research, said he was skeptical of the stimulus package because much of the spending in it may come well after the crisis is over, as a report from the Congressional Budget Office has suggested."
- During the January 24 edition of CNN's Your Money, CNN contributor Amy Holmes claimed, "[M]y priority would be looking at that stimulus package and cutting a whole lot of that fat out. We just got a report this week from the CBO that less than half of the $8.25 billion [sic] that's in this program ... less than half of that will even be spent to the end of 2011. Is this really a stimulus package or is this the same old, same old?"
- In a January 26 article, the Politico uncritically reported: "House Republican Leader John A. Boehner (Ohio) complains that the plan 'spends too much and spends it too late,' citing a preliminary readout by the Congressional Budget Office that shows very little money will be spent in the first six or so months after enactment."
- On the January 26 edition of Fox News' Fox & Friends, co-host Steve Doocy claimed that "[t]here's an item that has just come out from the Congressional Budget Office that says, you know, the whole idea is to stimulate the economy right now. Get the paddles out and shock the patient into, you know -- right now, the patient is dead, if you listen to people up on Capitol Hill. And, yet, according to the CBO, 40 percent of the discretionary stimulus money won't be spent -- 40 percent won't be spent in the first 18 months." Co-host Gretchen Carlson went on to note that "Robert Gibbs denied that during the press conference on Friday. He went out of his way as -- he denied it," but did not explain further.
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