Bush's New Math
Suppose you're the chief economic adviser to George W. Bush. For the past five months, you've been telling the public and your boss that his tax cut plan will cost $1.3 trillion over 10 years. How do you deal with the fact that your figure is arithmetically impossible? And more important, how do you counter Al Gore's widely reported claim that the Bush tax plan will cost more than $2 trillion over 10 years?
That was the conundrum facing Larry Lindsey, Bush's supply-side tax guru. To solve his problem, Lindsey went to the congressional Joint Committee on Taxation, whose vice chairman, Bill Archer of Houston, is a strong Bush backer. The committee's staff is widely respected for its nonpartisan analyses, so Lindsey had to frame his question carefully. And he did.
First of all, Lindsey asked the committee estimators for a nine-year rather than 10-year estimate. On top of that, he knew that the committee's results would ignore the hundreds of billions of dollars in added interest payments on the national debt that Bush's tax plan would entail--because accounting for interest is the job of the Congressional Budget Office. And finally, he apparently told the estimators to assume that a significant portion of Bush's income tax cuts would be offset by pushing millions of taxpayers into the Alternative Minimum Tax, even though everyone knows (and the Bush campaign has half promised) that won't be allowed to happen.
The taxation committee estimators did their work, and then Lindsey added the spin. In May the Bush campaign released what it titled the Joint Committee's "Ten Year," $1.3 trillion estimate for the Bush tax cuts. The quotation marks were provided by the campaign since the "Ten Year" period covered is fiscal 2002-2010, which of course is only nine years.
"The Joint Committee on Taxation proves that Vice President Gore was badly mistaken," Lindsey crowed. Which is pretty much a flat-out lie. Here are a few salient facts:
So the fact is that the Joint Committee figures confirm Gore's claim about the extravagant cost of Bush's tax cuts. That is, unless we're willing to accept the Bush campaign's crackpot theory that nine equals 10.
--Robert S. McIntyre