How Bush hides bad economic news.

How Bush hides bad economic news.

How Bush hides bad economic news.

Moneybox
Commentary about business and finance.
July 11 2003 3:56 PM

Bush's Data Dump

The administration is hiding bad economic news. Here's how.

President Bush
Slight of hand?

The Bush administration is finally facing tough questions about its selective use of intelligence in selling war with Iraq. But Americans shouldn't just be skeptical of what the president says about WMD. They should be skeptical of what he says about GDP. In economic policy even more than in war policy, the Bushies have successfully suppressed, manipulated, and withheld evidence to serve their policy purposes.

Advertisement

Of course every administration likes to trumpet its good news and hide its bad, but what's remarkable about the Bush team is its willingness to stifle data that had been widely released and to politicize data that used to be nonpartisan.

The administration muzzles routine economic information that's unfavorable. Last year, for example, the administration stopped issuing a monthly Bureau of Labor Statistics report, known as the Mass Layoff Statistics program,that tracked factory closings throughout the country. The cancellation was made known on Christmas Eve in a footnote to the department's final report—a document that revealed 2,150 mass layoffs in November, cashiering nearly a quarter-million workers. The administration claimed the report was a victim of budget cuts. After the Washington Post happened to catch this bit of data suppression, the BLS report was reinstated. (Interestingly, President George H.W. Bush buried these same statistics in '92, also during a period of job losses. They were revived by President Clinton.)

The Bush economic team has snuffed its own reports when they reach conclusions that don't match the administration's rosy scenarios. The administration deep-sixed a study commissioned by then Treasury Secretary Paul O'Neill that predicts huge budget deficits well into the future. As noted by the Financial Times in late May, this survey, which asserted that the baby-boom generation's future health care and retirement costs would swamp U.S. coffers, was dropped from a 2004 budget summary published in February 2003—at the same time the White House was campaigning for a tax-cut package that critics warned would greatly expand future deficits. "The study's [analysis of future deficits] dwarfs previous estimates of the financial challenge facing Washington," wrote the FT. According to the FT, a Bush official said the study was merely a thought exercise.

The administration also muffled a customary report whose findings would have forced key corporate supporters to pay more to their employees. The annual Adverse Effect Wage Rate establishes the minimum wage that can be paid each year to about 50,000 agricultural "guest workers" in the H2A Program. From AEWR's 1987 inception until 2000, the Department of Labor released the report in February. But in 2001, DOL withheld the wage figure until August, and only published it after the Farmworker Justice Fund threatened a lawsuit. In 2002, the DOL held up the report until May, again releasing it only after the prospect of legal action. The delays helped big agricultural firms, largely in the tobacco states and the South, by allowing them to pay their field workers last year's lower wages, saving the employers millions of dollars. Among those benefiting politically were Labor Secretary Elaine Chao's husband, Sen. Mitch McConnell of Kentucky, whose state relies on several thousand guest workers in its tobacco fields and who receives large contributions from agricultural interests.

Advertisement

Another administration trick is playing with the length of its economic forecast periods, which puts the best possible face on bad news while exaggerating the projected benefits of its own initiatives. For example, to heighten the impression that Social Security is running out of money (thereby strengthening the case for allowing workers to divert money from the system into private retirement accounts), the administration has predicted shortfalls far in the future by relying on preposterously long forecast periods. In a superb analysis of the budget in the June Harper's, Thomas Frank noted that in 2002 the administration declared an $18 trillion shortfall in Social Security and Medicare—about five times the current national debt. Frank notes that in order to arrive at the $18 trillion figure—since Social Security is currently in surplus—the administration used a "cumulative seventy-five-year estimate [Frank's itals] based on extreme long-term projections ... ." Meanwhile, even as it relies on 75-year projections for Social Security, the same document replaces traditional 10-year budget projections with five-year ones, claiming the longer-term numbers were unreliable.

President Bush also politicized the Council of Economic Advisers, which is supposed to produce straight analysis, not administration spin. CEA staffers complained that top Bush economic adviser Larry Lindsey, not even a member of the council, encouraged them to produce data supporting the president's controversial tax cut initiatives. CEA chairman Glen Hubbard also pushed staffers to find literature supporting the questionable argument that tax cuts created job growth.

On other occasions, the administration has punished economic officials who didn't follow the company line. Treasury Secretary O'Neill left the administration after, among other fits of candor, he expressed skepticism about economic figures the White House had released and suggested that the tax cut could be better used to buttress Social Security. And before Lindsey was made to take a dive, he predicted that the war in Iraq could cost upwards of $200 billion, a figure that infuriated the White House, which was selling the anti-Saddam campaign as a comparatively cheap victory.

Important economic data that casts a bad light on administration policies has been expunged from government Web sites. The Department of Labor removed a report showing the real value of the minimum wage over time, claiming it was "outdated." With no minimum wage hike since 1997, the Web site would have shown minimum-wage workers faring increasingly poorly under the Bush administration, while their real income went up under Clinton. (Some subheadings from the report: "Real Value of the Minimum Wage Continues Decline"; "Minimum Wage Falls Relative to Average Hourly Earnings"; "Minimum Wage Falls Below 2-Person Family Poverty Threshold.")

Earlier this year, a study predicting mediocre job growth from Bush's proposed $674 billion economic stimulus plan disappeared from the Council of Economic Advisers' Web site. The study forecast an average increase of only 170,000 jobs—0.1 percent of the workforce—every year through 2007. The study was pulled just after a major Jan. 7 Bush budget speech to the Economic Club of Chicago. "In the out years, by their own estimate, their plan is a job and growth killer," says Jared Bernstein, economist at the Economic Policy Institute. "Instead of doing what serious analysts would do and going to the drawing board to re-evaluate, they just took the offending document off the Web site."

Certainly, each one of these Bush team moves can be explained: administrative concerns, government paperwork reduction, outdated material, etc. Cumulatively, however, they certainly look suspect. We've seen the future, and it's been deleted.