LOYAL OPPOSITION: Charming the Truth Aside

In the first fortnight of the second Bush presidency, charm trumped truth. That's not so surprising. Truth is easy prey in Washington. But it certainly was rolled these past two weeks. The media devoted more ink and airtime to George W. Bush's punctuality (finally, a President who can keep track of the big hand and the little hand!) than to puncturing the various misrepresentations and mischaracterizations that zoomed through the initial policy initiatives and debates (make that, discussions) of Bush II.

In his premier action in office, Bush reimposed Ronald Reagan's global gag order that prohibited US government family planning funds from going to overseas groups that provide abortion services, lobby for abortion rights, or counsel pregnant women that abortion is an option. In his two-paragraph statement explaining the decision, Bush noted, "It is my conviction that taxpayer funds should not be used to pay for abortions or advocate or actively promote abortion, either here or abroad. It is therefore my belief that the Mexico City policy should be restored."

This was a disingenuous remark, for the funds in question -- $425 million -- do not underwrite abortion-related activity. Yes, some family planning groups that do offer or support abortion services would have received a portion of these millions, but that money would only support non-abortion activities.

Bush's "conviction" was misapplied. His revival of the gag rule was a punitive step aimed at outfits that engage in legal health services and advocacy. Had Bush wished to be forthright, he should have said, "It is my conviction that any group that actively supports abortion rights should be punished by being denied taxpayer assistance for its other endeavors." That would have been a much more accurate explanation. He could also have argued that in the real world all funds are fungible. Consequently, if you provide millions to an overseas family planning program for non-abortion services, that allows it to divert other funds to its abortion-related work.

But if Bush depended on that reasoning, he would undermine his own faith-based initiative, which is predicated on the assumption that the government can give money to a religious outfit for social services without subsidizing the religious functions of the group. (Money for soup kitchens, but not for proselytizing between courses.) Instead, the President falsely depicted his action. But, hey, how about all those cute nicknames he tosses out?

Then there were Bush's touchy-feely photo-ops at inner-city schools, as he flogged his education plan. Bush spoke of a new day for America's school, and his proposal, hailed as a good start by many Democrats, received a flood of positive press. The cable news stations broadcast the official unveiling live, the networks aired upbeat reports, and political journalists raised the possibility of a bipartisan win for Bush that would lend momentum to the rest of his legislative agenda. More attention was paid to the politics of the package than its substance.

The key provision of Bush's education initiative calls for schools to be held accountable by subjecting their students to annual tests, the results of which would be viewed as a measure of a school's performance. Scores go up, the school gets more money. Scores go down, it gets less. And if scores fall for several years, then Bush opens the door for vouchers.

Vouchers aside, judging schools on strict standards sounds reasonable. But would you be surprised to learn that Bush's widely praised scheme contains a fundamental flaw?

Tucked away in The New York Times was a short analysis, written by Richard Rothstein, which deftly showed how Bush's plan was bunk. Rothstein noted that there have been several studies of annual school testing, and that these examinations indicate that annual testing is a poor and unreliable means of evaluating schools. For example, Thomas Kane, an economist at the Hoover Institution, and Douglas Staiger, a Dartmouth College economics professor, looked at school tests in North Carolina, where teachers receive bonuses if a school experiences an above-average gain in its scores. Kane maintains that tiny sampling errors can skew scores and keep them from representing the school's true performance. For example, one year's fourth grade can greatly differ in ability than the next year's fourth grade. Kane estimates that in North Carolina elementary schools, nearly one-third of the variance in test scores is attributed to such arbitrary factors. Another one-third in the variance can be caused by random events -- a rainy day, say. In fact, a school's average can change from one day to the next.

Taking a test on one day is akin to conducting a public opinion poll on one day: it's a snapshot. It might measure the average performance level of the class; it could capture a peak or a low. As Rothstein noted, a "school's results may have more to do with sampling error than school quality."

That's worrisome, for, under the Bush plan, schools will live or die based on these tests. If the academics quoted in the Times piece are correct, the Bush initiative is worse than worthless; it can be destructive by producing a situation in which good schools (with bad scores) are punished and bad schools (with good scores) are rewarded.

Did all the coverage of the Bush education initiative probe this crucial issue? The Times did run this article. But there was precious little mention of this matter elsewhere. Is Bush selling America a faulty education plan? But, gee, he sure is down-to earth. Did you hear he sticks to his schedule?

Of course, there is no neighborhood where the truth is mugged more often than economic policy. After Federal Reserve chairman Alan Greenspan (the wizard of Washington) testified that the projected surpluses create sufficient room in the economy for a tax cut of the size Bush advocates, the Bushies crowed they now had Greenspan's seal of approval. Greenspan did not endorse Bush's specific plan, but that didn't matter.

Then the Congressional Budget Office released a forecast projecting the ten year surplus (excluding Social Security) to be $3.1 trillion, $700 billion more than the estimate put out by the Clinton Administration on January 16. Again, the Bush crowd declared that this demonstrated his $1.6 trillion tax cut (which is probably closer to $2.1 trillion) was affordable. "There is enough money," Bush pronounced.

Will you be shocked to hear the story's not that simple? Let's start with the CBO estimate. Several policy groups of different political stripes -- the Brookings Institution, the Concord Coalition and the Center on Budget and Policy Priorities -- each have pointed out that the CBO includes in its calculations various tax increases and program cuts that are highly unlikely to occur. It also counts in its estimate the Medicare surplus, which Congress has declared off-limits to tax cuts or other programs. Take away the Medicare surplus and apply more realistic assumptions about taxes and budget cuts, and, according to the Center on Budget and Policy Priorities, the true surplus -- that is, the pot of of money available for any use -- drops $1.1 trillion to $2 trillion.

And remember, this is economics. The numbers are fuzzy. The economy could grow slower than expected. (Did the economic forecasts of 1990 predict the surpluses that now exist? No.) If health care costs go up faster than assumed, the surplus figures will shrivel.

But even if the estimates hold (ha!), that would mean the entire surplus would be gobbled up by the Bush tax plan. What about funds for his military buildup and his expanded national missile defense system? (That's several hundred billion dollars right there.) What about more education funds? Money for prescription drugs for the elderly? What about paying down the debt? What about unforeseen needs? What about extra for Social Security? Or the $1 trillion in transition costs for the Social Security privatization plan Bush wants? If Bush wants to use all the available surplus for his tax cut, let him make that argument.

There is also the question of the necessity of his tax cut. Greenspan's testimony was used by the Bush band to reinforce their assertion that a tax cut is desperately needed to keep the economy from freefalling. The logic of their position doesn't hold. Greenspan okayed a super-sized tax cut because he foresaw economic growth and mega-surpluses in the years ahead -- without a big tax cut. Both the CBO and Greenspan believe that in the coming ten years economy will be even stronger than it has been, and they are not worried that the current dip has long-term significance. (Tell that to the tens of thousands being laid off.)

So if the economy is in a solid position, why rush ahead with a tax cut that eats up a surplus which may or may not be there in the future? Lowering interest rates may get the economy through its current blues, and most economists believe that doing so is a more effective way of stimulating a sluggish economy than tax cuts. And consider the tax cut Bush fancies. Over 40 percent of it (about $800 billion) would go to the top 1 percent (people with annual income of over $319,000).

The Bush gang claims his tax cut will stimulate the economy. But will placing all this money in the pockets of the wealthy increase consumer demand? After the buying binge of the past eight years, how much more can a well-off American purchase? It is more reasonable to assume they will put this extra money into securities and invest in a market that remains reasonably high. (If the Bush goal is to make capital more available to businesses looking to expand, then lowering interest rates is probably a more immediate means to that end.)

What Bush is pushing is the same-old, trickle-down, supply-side economics. Give money to the rich, and somehow it will benefit the rest of the citizenry. This is what Bush's father once called "voodoo economics" -- that is, until he accepted Ronald Reagan's be-my-veep invitation in the 1980 campaign. But if you provide tax relief to middle- and low-income Americans -- say, use half (or less) of the projected non-Social Security surplus to finance a cut in payroll taxes -- those dollars probably will be spent on consumer products and services (maybe on education, as well) and provide some sort of kick to the economy. But, again, if Greenspan, the CBO and others are right to be so bullish on the US economy, there may not be a need for a tax-cut stimulus.

Bush and his lieutenants are not being completely honest when they talk about the necessity and the economics of his tax cut. As the Center for Budget and Policy Priorities puts it, "When considered on their merits, the arguments for and against a large permanent cut remain essentially the same as they were last summer. Whether to enact a large permanent tax cut is fundamentally an issue of national priorities, not a question of how to shore up a weak economy. Policymakers must weigh the benefits of a large tax cut that consumes the lion's share (or all) of the realistically available no n-Social Security surplus, against the benefits of additional debt reduction, a Medicare prescription drug benefit, increased aid to education, health insurance for those who lack it, measures to reduce child poverty, additional resources to shore up Social Security and Medicare for the long term, continued modernization of the military, and the like."

Look beyond Bush's meet-and-greets and the come-together happy-talk, and it's not hard to see there's far more charm than truth emanating from the White House these days. (Is there something in the water there?) But -- glory be! -- at least the bullshit proceeds right on time.


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