Cherry Picking

Ruth Marcus, a deficit-hawk from the Washington Post's editorial page and Brian Riedl from the right-wing Heritage Foundation have accused each other of cherry picking economic data to support their respective contentions (that Congress should allow the 2001 and 2003 tax cuts to expire or that Congress should renew them). The spat began with an op-ed from two weeks ago where Marcus criticized Republicans for their constant insistence that taxes ought to always be cut. To illustrate her argument that Republicans were out of touch with reality she pointed to a widely circulated quote from Senate Minority Leader Mitch McConnell in which he claimed, "There's no evidence whatsoever that the Bush tax cuts actually diminished revenue. They increased revenue, because of the vibrancy of these tax cuts in the economy." Marcus pointed out that government revenues did indeed fall -- from 21% of GDP in 2000, the year before the first tax cuts were enacted to 17.5% in 2007. (As, Marcus herself noted later, McConnell was right that gross tax revenue itself increased over the period following the Bush tax cuts, but given that that increase was only about rate of inflation; for McConnell to be correct, he have to assume that without tax cuts, real economic growth would have been zero.)

In response, conservative supporter of the Bush tax cuts, Brian Riedl claimed that choosing the year 2000 as a starting point was unfair because that year marked a high-water mark for government revenues. He claimed that longer term data show that since the Bush tax cuts, revenue has been relatively consistent with its average over the past half-century and proves his point with a graph entitled "Surging Spending is the Cause of Rising Deficits" (shown at the bottom of the page, the graph actually shows that future deficits will be caused by rising spending, but that the current ones are caused only by a combination of low taxes and high spending).

Last week Marcus shot back, accusing Riedl of cherry picking of his own. The Heritage Foundation graph bases its spending projections on the idea that spending on existing programs grow at the rate of GDP growth, while the Office of Management of Budget and Congressional Budget Office assume that it will grow at the lower rate of inflation. Under more typical assumptions, tax cuts will account for 60% of the projected deficit by 2019.
SSDAN Office

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