Saturday, September 18, 2004

Bush: Misinforming voters

Bush: Misinforming voters


Bush on Income

Bush seldom fails to tout the benefits of his tax cuts -- selectively -- and lately has added a claim that after-tax incomes have risen 10% since he took office, a figure that is deceptive.

He says "Real after-tax incomes are up almost 10 percent since December of 2000," Clinton's last full month in office. That's from the Department of Commerce, a statistic called "real disposable income." It refers to the total of all inflation-adjusted income earned by all persons, minus taxes.

Bush fails to mention that much of the increase is due to simple population growth. Adjust it for that, and the per-capita growth is less than 6%. And even that doesn't tell you who got the income. Roughly half of all personal income goes to the most affluent one-fifth of the population.

Typical families and households haven't seen such an increase. The Census Bureau's annual survey shows that inflation-adjusted income for the median household -- the midpoint -- fell by $1,535 in Bush's first 3 years, a decline of 3.4 percent. Even after-tax income was still falling in 2002 according to the most recent Census figures available.

It is true as Bush claims that a family of four making $40,000 a year got nearly a $2,000 tax cut (when compared to tax rates in 2000), according to the independent Tax Policy Center and others. That is, if both children were under age 17 and so qualified for the doubled per-child tax credit. Bush doesn't mention that childless taxpayers didn't make out nearly so well, and those in high income brackets made out much better.

Bush on Kerry's Spending

Bush currently is quoting a new study estimating that Kerry's health-care plan will cost $1.5 trillion over 10 years. "He can't pay for it unless he raises your taxes," Bush declares.

The study is from the American Enterprise Institute, a think tank in Washington that describes itself as favoring "limited government" and "private enterprise." Previously, the Bush campaign quoted a much lower estimate from Ken Thorpe of Emory University in Atlanta, a health-care finance expert who worked in the Clinton administration. Thorpe disputes the AEI study, saying it is full of mistakes.

The Thorpe study and the AEI study agree on two things. First, both studies estimate that 27 million currently uninsured persons would get health coverage. By both estimates, Kerry's plan would cover several times more additional persons than what Bush proposes. The other thing both studies confirm is that Kerry's plan would reduce health-insurance premiums for those already covered, something it is designed to do. (The AEI study calls this a "windfall" and seems to see it as a flaw, rather than a positive factor.)

Bush's speech is misleading when he says Kerry would have to raise "your" taxes to pay for his health plan. Kerry does propose to raise federal income taxes, but only for those making $200,000 a year or more. Bush would be accurate if he said Kerry would raise taxes for "some of you."

Bush on Jobs

Bush also says "over the past year" the economy has added 1.7 million jobs, and that's true. And he says the 5.4% unemployment rate for August is lower than the average rate for the 1970's, 1980's and 1990's, which is also true. Here are the averages for those decades, derived from Bureau of Labor Statistics figures:

Average Unemployment Rates

1970's . . .6.2%

1980's . . . 7.3%

1990's . . . 5.8%

In fact, the current jobless rate is just a little better than the 5.6% average unemployment rate for each month since 1948, when the Bureau of Labor Statistics began keeping track.

What Bush leaves out, of course, is that 5.4% is slightly worse than the average for the full eight years of Clinton's two terms, which was 5.2%. And not nearly as good as the under-4% rate reached in several months of Clinton's final year. Bush also says nothing about the fact that as of August, the number of persons employed in payroll jobs was still 913,000 below what it was when Bush took office in 2001. At the current rate of growth it is almost certain that Democrats will be proven right about Bush being the first President since Hoover to suffer a net job loss over a full four-year term.

[What is also not mentioned in the information above is that the new jobs that have been added do not keep pace with the number of new people entering the work force, and also, like every other report, fails to give any clue as to what kinds of jobs are being created vs. those that have been lost.]