Of debt, taxes and time travel
Truth can be a complicated thing.
Take, for example, a recent claim from Rep. Robert C. "Bobby" Scott, D-3rd, who marked the 10th anniversary of tax cuts enacted by President George W. Bush by condemning them as a "one of our nation's biggest fiscal disasters."
In a June 7 news release Scott -- who opposed the first round of tax cuts in 2001, the second round in 2003, and every extension since -- blamed much of the nation’s current fiscal woes on on the reductions.
Scott noted that the federal government was running a surplus in 2001 and had an opportunity to shore up Medicare and Social Security and pay down the national debt. By cutting taxes "we more than doubled the national debt and squandered a projected $5.6 trillion ten-year surplus, which was sufficient to pay off the debt held by the public by 2008," Scott said.
We originally set out to fact-check that claim, but ran into a problem. While the numbers technically add up, they are wildly speculative and essentially meaningless, especially given Scott’s underlying argument, and the facts he chooses to ignore.
First, let’s give credit where credit’s due.
Scott’s right that the national debt has more than doubled. The total debt on June 7, 2001 -- the date the first round of Bush-era tax cuts was signed into law -- was $5.7 trillion, according to the U.S. Treasury. As of June 7, 2011, the date of Scott’s press release on the cuts, the figure was $14.3 trillion.
As for that mysterious $5.6 trillion surplus, he’s correct on that one, too. In a 2001 report, prior to the tax cuts, the Congressional Budget Office projected that between 2002 and 2011, more than $5.6 trillion in annual surpluses would accumulate if policies remained unchanged.
Finally, Scott says that figure would be enough to pay off the debt held by the public by 2008. Again, he’s technically correct. According to the U.S. Treasury, the debt held by the public at the start of 2008 was a little over $5.1 trillion, meaning the hypothetical $5.6 trillion is larger.
But only $2.6 trillion of that 10-year surplus would have accumulated by 2008, according to CBO estimates. So Scott’s statement involves some bizarre time travel that starts in 2001, seizes money that might have accumulated in a static world in 2011, then zooms back to pay off a debt in 2008.
Scott’s argument ignores a few details that drove up debt like, say, two wars overseas and the worst economic downturn since the Great Depression which resulted in stimulus spending that the congressman supported.
And that’s the problem with all this, of course -- it’s pure speculation. Scott’s using decade-old estimates and manipulating the numbers to make an argument.
In the end, we can’t fact-check Scott’s opinion that the nation would have been better off without the tax cuts. As for his suggestion that the U.S. was en route to becoming free of public debt, we’ll leave that to time travelers.