I Dub Thee Surplus

I Dub Thee Surplus

I Dub Thee Surplus

A summary of what's in the major U.S. newspapers.
Oct. 1 1998 7:24 AM

I Dub Thee Surplus

The first federal budget surplus in twenty-nine years leads at the New York Times and Los Angeles Times. The Washington Post goes with NATO preparations for airstrikes against Slobodan Milosevic's forces in Yugoslavia. USA Today leads with the financial markets' reaction to the Fed rate cut.

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Both Times leads record yesterday's Bill Clinton-led White House ceremony commemorating the estimated $70 billion in the federal plus column. But it's the WP's inside story that rolls out a professor from some place called Carleton College to best summarize the moment: "He came in hoping to be Franklin Roosevelt, and ended up being Dwight Eisenhower."

Both Times and the WP stress the partisan carping the surplus has inspired: the Democrats want credit for passing a 1993 tax increase without a single Republican vote, and the Republicans want credit for pressuring Clinton in 1995 to commit to a balanced budget. The WP says that few things irk Clinton more than not being given credit for ending permanent deficits.

The LAT helpfully includes some non-partisan explanations for the surplus: the peaceful dissolution of the Soviet Union, which kept defense spending from going higher, the moderation of health care costs, and the extra tax revenue wrought by the stock market boom.

The NYT stresses that for all the credit-claiming, the current budget process is still, to put it Timesly, "untidy"--with only nine days left before the congressional recess, the paper notes, only 2 of the 13 spending bills required for government operations have been completed. Also, the papers explain, the parties now disagree about what to do with the surplus--Clinton wants to reserve it for dealing with the coming Social Security crunch, although he wants to use some of it for keeping U.S. troops in Bosnia and to solve the Y2K problem, while the Republicans are against that spending, but want to allocate at least some of the surplus to tax relief.

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According to the WP lead and front-page stories at the NYT, USAT and the LAT, all indications are that the discovery earlier this week of the bodies of dozens of massacred ethnic Albanians has galvanized the U.S. and NATO into planning imminent military action--probably airstrikes--against Yugoslavia. Nobody has pictures in the paper today to match the one of a massacre victim that ran (in color) in the NYT yesterday.

The USAT lead puts the dubiousness of one-day economic analysis and the folly of giving much newspaper space to it on full display. The story's headline and first paragraphs emphasize yesterday's 238 point drop in the Dow and the dip of 30-year Treasury bonds below 5 percent for the first time ever, and say that "analysts" see these developments as a flight from international stock markets (probably the wrong word--these days, all stock markets are international--what's meant is "overseas"). But this leaves unexplained why this flight didn't roost in the U.S. stock market as well as in the U.S. bond market. Also, the concerned tone of the story takes too narrow a point of view--basically that of a stockholder or bond buyer--whereas there is good news here too. After all, bad news for lenders is good news for borrowers--housing mortgage rates are wonderful right now and off the Treasury yield dip can only get wonderfuller. (The NYT front-page market piece has many of the same tics, but at least mentions the plus for home buyers. By the way, the Wall Street Journal reports that the recent dip in new-home sales is probably mostly due to a non-financial factor: Hurricane Bonnie.)

A front-page LAT story reports that Hillary Clinton told "associates" (one of whom was, according to the paper, almost surely Sidney Blumenthal) that her husband assured her last January that he was not having an affair with Monica Lewinsky, but was merely "ministering to a troubled young person." Depends what you mean by "ministering."

Another sign that the press may be ending its post-Gulf War free pass for the U.S. military comes with today's NYT lead editorial, "The Insatiable Pentagon," which calls the current arguments in Washington about whether the DOD's $271 billion budget is enough "surreal." But in case you think such criticism means the defense business is headed for a correction, check out James Glassman's stock tip column today in the WP, in which he states, "It's almost certain that Congress will use a good chunk of the budget surplus for defense." Glassman goes on to note that some leading professional investors consider such stocks as Northrop Grumman, Raytheon, and Lockheed Martin to be excellent buys.

The WP's TV column notes that earlier this week, the Los Angeles City Council passed a motion condemning the new sitcom "The Secret Diary of Desmond Pfeiffer," a show about a black butler and personal advisor to President Lincoln that includes cavalier references to slavery. The show has also, reports the Post, been protested by the NAACP's Beverly Hills/Hollywood chapter. Wonder what the LACC and NAACP position was on "Hogan's Heroes."