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February 27, 2005

Why Oh Why Can't We Have a Better Press Corps? (The Washington Post Does It Again)

Jim VandeHei and Jonathan Weisman write that "...to help readers cut through the rhetoric, The Washington Post interviewed budget experts on both sides of aisle, who challenged some of the most important claims made by Bush and his Democratic critics in Congress...." But if they did, they don't tell us. The only person quoted by name who might be considered a budget expert is Chicago's Austan Goolsbee. And what VandeHei and Weisman write certainly doesn't enlighten. For example:

washingtonpost.com: Partisan Social Security Claims Questioned: Both sides have marshaled -- or twisted -- facts and figures to back up those seemingly irreconcilable views.... To help readers cut through the rhetoric, The Washington Post interviewed budget experts on both sides of aisle, who challenged some of the most important claims made by Bush and his Democratic critics in Congress....

There is no arguing that individual accounts alone will cost taxpayers a lot of money initially as the government transitions from the current pay-as-you-go system to a partially privatized one. But it is impossible to slap a realistic price tag on the Bush plan until the president shares with Americans the specific benefit cuts and other changes that will accompany the new accounts.

As a result, the Democrats' $4.9 trillion figure is as debatable and politically motivated as Bush's $754 billion estimate, budget experts say.... Bush says the accounts would cost about $754 billion over the next 10 years. This might be true, but only because it is based on the program starting in 2009 and being fully implemented in 2011. The costs skyrocket when the new accounts are open to all. Senate Minority Leader Harry M. Reid (D-Nev.) says that it will cost $4.9 trillion over a 20-year period, starting in 2009. Vice President Cheney recently said the accounts would cost 'trillions of dollars,' which is probably the most honest, if vague, estimate, budget experts said."

What Weisman and VandeHei miss is that you get from Bush's $754 billion over 10 years to Reid's $4.9 trillion over 20 years through simple arithmetic. It's 2005 now. The plan doesn't start being implemented until 2009. Bush has said that in the first years the diversion of revenue is capped at $1000 per worker, and that that cap is gradually lifted to a level equal to 4% of wages. With an average wage of $50,000, that's $2000 per worker. In the first years the diversion is limited to about 2/3 of the workforce--the relatively young--with that proportion rising over time. In Reid's calculation, you are counting up diversions of revenue for more people (as the private account system expands), counting up diversions per person that are twice as large per year, counting them up for twice as long a period. That gets you from $754 billion to $4.5 trillion. And a few technical details take care of the rest.

Bush and Reid are singing off of the same sheet. THERE ARE NO IRRECONCILABLE DIFFERENCES IN THE NUMBERS. THE NUMBERS COME FROM VERY SIMILAR ECONOMIC AND FINANCIAL ASSUMPTIONS. REID'S IS "POLITICALLY MOTIVATED" AND "TWISTED" ONLY TO THE EXTENT THAT COUNTING COSTS OVER 20 YEARS RATHER THAN 10 IS "TWISTING."

I can't stand this. I really cannot stand this.

Back in the Clinton administration, and in the Bush I administration, and in the Reagan administration, and in the Carter administration, and so on back time out of mind, there was a convention people used: discuss every program as if it were fully phased-in in the current year. That avoided confusion about windows and inflation and partial phase-ins and so forth. The Bush administration doesn't work this way: it wants to maximize confusion over the effects of its policies.

But it wouldn't matter that the Bush administration tries to confuse if we had a half-competent press corps on the job.

Posted by DeLong at February 27, 2005 09:43 AM