Grading PolitiFact (Virginia): Bobby Scott and the cost of tax compromise

The issue:

The fact checkers:

Wes Hester:  writer, researcher
Warren Fiske:  editor


Analysis:

The context of Rep. Robert C. "Bobby" Scott's (D-Va.) statement:

“This bill adds more than $800 billion to the deficit over two-years – more than the cost of TARP and more than the cost of the Recovery Act.   It costs about the same over two years as the 10 year cost of the Health Care Reform bill, which we paid for."

(...)

“We cannot add more than $800 billion to the deficit through tax cuts and tell the American people with a straight face that they won’t have to sacrifice anything in the future to balance the federal budget.  If we didn’t have the political will to end the Bush-era tax cuts tonight, we certainly won’t have the political will to do it two years from now during a presidential election.”

I included the latter paragraph to help make clear what Scott was trying to communicate.  He is saying that extending all of the tax cuts adds more than $800 billion to the deficit.  Note that PolitiFact does not frame the issue the same way:  "Rep. Bobby Scott says the tax deal costs the same as health care reform, exceeds price of Stimulus and TARP."

Tax cuts, tax deal.  The difference is significant, as we shall see.


PolitiFact:

First, is the $800 billion for the tax cuts continuation correct?

Yup, the Congressional Budget Office score of the tax compromise for just the next two years -- 2011 and 2012 -- is $797 billion.

The question concerns "$800 billion for the tax cuts," but the answer speaks of $797 billion for the "tax compromise."  And the CBO score helps explain the difference between the two.  It amounts to the fact that PolitiFact answers a question other than the one it asked.

The CBO score has three main sections.  The top section is titled "Changes in Revenues."  The middle section carries the title "Changes in Direct Spending."  The last of the three is titled "Net Increase or Decrease (-) in Deficits from Revenues and Direct Spending."  The $797 billion figure PolitiFact used to confirm Rep. Scott's claim apparently comes from the third section:

374,154 + 422,910 = 797,064

The problem should be immediately obvious and cause us to wonder how professional journalists could miss it.  How do we count outlays as tax cuts?  Perhaps it occurs through the magic of the "tax credit," which counts money given to some people as a tax cut.  The total deficit attributed to direct spending in the report is nearly $98 billion, so Scott could be off by over $100 billion with his $800 billion figure.

Let's go easy on Scott, however.  Many of the outlays, after all, are described in the report as tax cuts of one type or another and some of the descriptions are ambiguous, such as "Temporary Extension of Certain Expiring Provisions."

One line from the outlays section can't qualify as a tax cut, however.  That's the feature of the compromise bill, Title V, that Scott said he favored:  The extension of unemployment benefits.  The outlay for the first two years comes to $56 billion.  There simply isn't any reasonable way to count the cost of the extension of unemployment benefits as an extension of tax cuts.  As a result, the cost of extending the tax cuts can't be higher than about $741 billion, neglecting the possibility that the CBO exercised its penchant for static analysis.  Growth in the economy should result in more government revenue, reducing the deficit somewhat from the $741 billion figure.

PolitiFact used $700 billion as the cost of TARP, $813 billion as the cost of the Stimulus, and $788 billion as the cost of the health care reform bill.  Using the charitable $741 billion figure for tax cut extension, Scott is flatly wrong two out of three times.  Subtracting the entire set of outlays from the cost of the tax cut compromise makes Scott wrong on all three.

There's one way to make Scott appear mostly correct, however:  Make it look like Scott was talking about the entire cost of the compromise bill,  including the extension of unemployment benefits he favored.  Call it "tax deal" instead of "tax cuts" and ignore Scott's misleading language.

Surprise!  That's exactly what PolitiFact did.  Unfortunately, that strategy goes well beyond charitable interpretation and well into the realm of spin doctoring--at least if we assume that those responsible knew what they were doing.

He’s right on TARP, right on health care reform, and off by a tad on the Stimulus -- perhaps because the cost estimate of the act recently changed.

We rate his claim Mostly True.

I hold that it's quite possible and even likely that the journalists were led innocently into error by their ideological bias.  Though simple ineptitude offers another highly plausible explanation.  Getting two out of three wrong shouldn't count as "Mostly True," and Scott may well have been wrong on all three in terms of his "tax cuts" language.


The grades:

Wes Hester:  F
Warren Fiske:  F

Neither innocent error caused by bias nor simple ineptitude serve to excuse bad reporting/analysis.

This gets the tag "journalists reporting badly."