An AP story at http://news.yahoo.com/news?tmpl=story&u=/ap/20040409/ap_on_go_ca_st_pe/treasury_taxes_1 recounts how the Treasury Department issued several tax-related press releases on April 9th that contained the following message in dark type at the bottom:
America has a choice: It can continue to grow the economy and create new jobs as the President's policies are doing; or it can raise taxes on American families and small businesses, hurting economic recovery and future job creation.
The AP story goes on to state that "Democrats immediately denounced the action as an improper use of government resources to subsidize political propaganda". However, the content of some of the press releases seems equally disturbing. Following are excerpts from one that can be found at http://www.treasury.gov/press/releases/js1317.htm:
America's economy is strong and getting stronger.
* Without the President's needed tax relief plan, by the end of this year
real GDP would be about 3.5 to 4 percent lower.
* Instead, in the last half of 2003 we witnessed the strongest economic
growth in nearly 20 years.
* The strength of the economy's underlying fundamentals indicates economic
activity will continue above the historical average.
The Treasury doesn't say why they believe that "GDP would be about 3.5 to 4 percent lower". In fact, they don't even state it as a belief, they state it as a fact. Has the Treasury developed infallable powers of prediction? Were they informed directly by God? The Treasury doesn't say. In any case, they continue:
More Americans are going to work and more Americans are staying on the job.
* If not for the President's timely economic growth measures, by the end of this year the unemployment rate would be as much as 1.6 percentage points higher and as many as 3 million fewer Americans would be working.
Once again, the Treasury presents a prediction as fact with no explanation of what this "fact" is based on. In any case, they continue:
* But because of the President's commitment to strengthen the environment for job creation, and the positive impact of his tax relief measures, over three-quarters of a million new jobs were created over the past seven months, 308,000 in March alone.
It is true that the payroll survey shows slightly over three-quarters of a million new jobs created over the last seven months and 308,000 in March alone. However, the month from which the Treasury chose to measure just happens to be the precise low point in last several years of job losses. The following table shows the total nonfarm employment for every month since January 1999, according to the payroll survey:
TOTAL NONFARM EMPLOYMENT (in thousands)
Month 1999 2000 2001 2002 2003 2004
----- ------ ------ ------ ------ ------ ------
Jan 127477 130730 132388 130494 130190 130194
Feb 127873 130876 132492 130404 130031 130240
Mar 127997 131369 132507 130447 129921 130548
Apr 128379 131677 132236 130379 129901
May 128593 131908 132237 130381 129873
Jun 128850 131883 132087 130406 129859
Jul 129145 132043 131972 130295 129814
Aug 129338 132015 131831 130306 129789
Sep 129525 132104 131564 130259 129856
Oct 129947 132134 131203 130342 129944
Nov 130242 132317 130871 130305 130027
Dec 130536 132441 130659 130096 130035
As can be seen, seven months ago (August of 2003) marks the lowest level of total nonfarm employment since September of 1999. The following table shows the change in employment from every month since January of 1999 to March 2004:
CHANGE IN TOTAL NONFARM EMPLOYMENT
(from specified month to March 2004, in thousands)
Month 1999 2000 2001 2002 2003 2004
----- ------ ------ ------ ------ ------ ------
Jan 3071 -182 -1840 54 358 354
Feb 2675 -328 -1944 144 517 308
Mar 2551 -821 -1959 101 627 0
Apr 2169 -1129 -1688 169 647
May 1955 -1360 -1689 167 675
Jun 1698 -1335 -1539 142 689
Jul 1403 -1495 -1424 253 734
Aug 1210 -1467 -1283 242 759
Sep 1023 -1556 -1016 289 692
Oct 601 -1586 -655 206 604
Nov 306 -1769 -323 243 521
Dec 12 -1893 -111 452 513
As can be seen, employment has grown by 759 thousand jobs since August of 2003. However, it is still down 1944 thousand jobs since March of 2001. That's a loss of nearly two million jobs in three years.
Another one of the press releases of note can be found at: http://www.treasury.gov/press/releases/js1315.htm. It argues for an extension of the tax cuts which are scheduled to expire and presents six examples of how much more some taxpayers will have to pay if they do expire. The six example sets of taxpayers that they choose are:
1) A married couple with one child and income of $40,000.
2) A married couple with two children and income of $40,000.
3) A married couple with two children and income of $60,000.
4) A married couple with two children and income of $80,000.
5) A married couple, both aged 65, with income of $40,000 (of which $2,000 is dividends and $15,000 is Social Security benefits).
6) A married couple, both aged 65, with income of $80,000 (of which $4,500 is dividends and $20,000 is Social Security benefits).
These are basically the same six examples that the Treasury department used to argue for the Bush tax cut to begin with. Note that all six sets of taxpayers are married, the first four have children, and the last two have dividends. They seem designed to make maximum use of the provisions of the Bush tax cuts, namely the relief of the marriage penalty, the child tax credit, and the cut in the tax on dividends. For some reason, they did not include any examples of single taxpayers or younger taxpayers without children. This is obviously not a random sampling of taxpayers. For a closer look at the six examples, see the analysis at http://home.att.net/~rdavis2/tax03ex.html.
Incidentally, it's interesting to note that a bulletin on the White House website at http://www.whitehouse.gov/news/releases/2004/04/20040402-2.html contains the following line:
America has a choice: It can continue to grow the economy and create new jobs as the President's polices are doing; or it can raise taxes on American families and small businesses, hurting economic recovery and future job creation.
Except for the misspelling of the word "policies", that's identical to the line at the end of the Treasury bulletins. The White House bulletin is dated one week earlier than the Treasury bulletins so it seems likely that the Treasury got this campaign slogan from the same source as the White House or from the White House itself.
In any case, it's disturbing to see the Treasury Department use taxpayer money to fund such seemingly partisan bulletins. Of course, they likely would argue that the bulletins are not partisan. Hopefully a non-partisan group, like the courts, can address this issue. In any case, it would be nice if the Treasury department would state projections as projections and not as facts. In addition, it would be nice if they would give sources for their statements. As argued above, the Treasury Department appeared to engage in cherry-picking in several of their statements. Only by checking their sources, can it be determined if some or all of their other statements are similarly misleading.