The disparity between the defense secretary and President Trump added another twist to an ever-evolving explanation for a strike on an Iranian general that led to the brink of war.
They had to kill him because he was planning an “imminent” attack. But how imminent they could not say. Where they could not say. When they could not say. And really, it was more about what he had already done. Or actually it was to stop him from hitting an American embassy. Or four embassies. Or not.
For 10 days, President Trump and his team have struggled to describe the reasoning behind the decision to launch a drone strike against Maj. Gen. Qassim Suleimani, the commander of Iran’s elite security forces, propelling the two nations to the brink of war. Officials agree they had intelligence indicating danger, but the public explanations have shifted by the day and sometimes by the hour.
On Sunday came the latest twist. Defense Secretary Mark T. Esper said he was never shown any specific piece of evidence that Iran was planning an attack on four American embassies, as Mr. Trump had claimed just two days earlier.
“I didn’t see one with regard to four embassies,” Mr. Esper said on CBS’s “Face the Nation.” But he added: “I share the president’s view that probably — my expectation was they were going to go after our embassies. The embassies are the most prominent display of American presence in a country.”
The sharp disparity between the president and his defense secretary only added to the public debate over the Jan. 3 strike that killed Iran’s most important general and whether there was sufficient justification for an operation that escalated tensions with Iran, aggravated relations with European allies and prompted Iraq to threaten to expel United States forces. General Suleimani was deemed responsible for killing hundreds of American soldiers in the Iraq war more than a decade ago, but it was not clear whether he had specific plans for a mass-casualty attack in the near future.
The Trump Administration’s Fluctuating Explanations for the Suleimani StrikeWhile agreeing that General Suleimani was generally a threat, Democrats in Congress, as well as some Republicans, have said the administration has not provided evidence even in classified briefings to back up the claim of an “imminent” attack, nor has it mentioned that four embassies were targeted. Even some Pentagon officials have said privately that they were unaware of any intelligence suggesting that a large-scale attack was in the offing.
But senior government officials with the best access to intelligence have insisted there was ample cause for concern even if it has not been communicated clearly to the public. Gina Haspel, the director of the C.I.A., and Gen. Mark A. Milley, the chairman of the Joint Chiefs of Staff — who were both appointed by Mr. Trump but are career officials without a political history — have said privately and forcefully that the intelligence was compelling and that they were convinced a major attack was coming.
The challenge for the Trump administration is persuading the public, which has been skeptical about intelligence used to justify military action since President George W. Bush invaded Iraq in 2003 based on what turned out to be inaccurate intelligence indicating that Saddam Hussein had weapons of mass destruction.
Mr. Trump himself has made clear in other circumstances that he does not trust the intelligence agencies that he is now citing to justify his decision to eliminate General Suleimani. Moreover, given his long history of falsehoods and distortions, Mr. Trump has his own credibility issues that further cloud the picture. All of which means the administration’s failure to provide a consistent explanation has sown doubts and exposed it to criticism.
“If indeed the strike was taken to disrupt an imminent threat to U.S. persons — and that picture seems to be getting murkier by the minute — the case should be made to Congress and to the public, consistent with national security,” said Lisa Monaco, a former senior F.B.I. official and homeland security adviser to President Barack Obama. “Failure to do so hurts our credibility and deterrence going forward.”
Intelligence officials, who spoke on the condition of anonymity to describe sensitive data collection, have said there was no single definitive piece of information about a coming attack. Instead, C.I.A. officers described a “mosaic effect,” multiple scraps of information that came together indicating that General Suleimani was organizing proxy forces around the region, including in Lebanon, Yemen and Iraq, to attack American embassies and bases.
Several officials said they did not have enough concrete information to describe such a threat as “imminent,” despite the administration’s assertion, but they did see a worrying pattern. A State Department official has privately said it was a mistake for Secretary of State Mike Pompeo to use the word “imminent” because it suggested a level of specificity that was not borne out by the intelligence.
“I have not seen the intelligence, just to be clear, but it is sometimes possible for the reporting of planned attacks to be very compelling even without specificity of time, target or method,” said John E. McLaughlin, a former acting C.I.A. director. “In a sense, that is the story of 9/11. Our reporting gave us high confidence that a big attack was coming — and we so warned — but we were unable to nail down key details.”
Mr. McLaughlin said that the administration may well have had intelligence adequate to compel action, but that it was a separate question whether killing General Suleimani was the most effective response, as opposed to hardening targets or choosing a less provocative option.
John B. Bellinger III, who was the top lawyer for the National Security Council and later the State Department under Mr. Bush, said the president would have legal authority to strike under the Constitution whether or not there was fear of an imminent attack.
But under the United Nations Charter, the United States cannot use force in another country without its consent or the authority of the Security Council except in response to an armed attack or a threat of an imminent armed attack. “So under international law, the attack on Suleimani would not have been lawful unless he presented an imminent threat,” Mr. Bellinger said.
Claims that an imminent attack could take “hundreds of American lives,” as Mr. Pompeo put it right after the drone strike, have also generated doubts because no attack in the Middle East over the past two decades, even at the height of the Iraq war, has ever resulted in so many American casualties at once in part because embassies and bases have become so fortified.
The contrast in descriptions of what the administration knew and what it did not came in quick succession on a single Fox News show last week.
On Thursday night, Mr. Pompeo, while sticking by his description of an “imminent” attack, acknowledged that the information was not concrete. “We don’t know precisely when and we don’t know precisely where, but it was real,” he told the host, Laura Ingraham.
The next day, in a separate interview, Mr. Trump told Ms. Ingraham that in fact he did know where. “I can reveal that I believe it probably would’ve been four embassies,” he said.
That left administration officials like Mr. Esper in an awkward position when they hit the talk show circuit on Sunday. While the defense secretary revealed on CBS that he had not seen intelligence indicating four embassies were targeted, he sounded more supportive of Mr. Trump’s claim on CNN’s “State of the Union.”
“What the president said in regard to the four embassies is what I believe as well,” he said, seeming to make a distinction between belief and specific intelligence. “And he said he believed that they probably, that they could have been targeting the embassies in the region.”
Appearing on “Fox News Sunday,” Robert O’Brien, the president’s national security adviser, played down Mr. Trump’s claim of specific, imminent threats to four American embassies in the region.
“Look, it’s always difficult, even with the exquisite intelligence that we have, to know exactly what the targets are,” Mr. O’Brien said. “We knew there were threats to American facilities, now whether they were bases, embassies — you know it’s always hard until the attack happens.”
“But,” he added, “we had very strong intelligence.”
Senator Mike Lee of Utah, one of the administration’s most outspoken Republican critics after the strike, said on CNN that he worried about the quality of the information that national security officials were sharing with Congress and had not “been able to yet ascertain specific details of the imminence of the attack.”
“I believe that the briefers and the president believed that they had a basis for concluding that there was an imminent attack, I don’t doubt that, but it is frustrating to be told that and not get the details behind it,” he said.
Speaker Nancy Pelosi struck a similar tone, telling ABC’s “This Week” that “I don’t think the administration has been straight with the Congress of the United States” about the reasons for killing General Suleimani.
On “Face the Nation,” Representative Adam B. Schiff, Democrat of California and chairman of the House Intelligence Committee, accused the president and his top aides of “fudging” the intelligence.
“Frankly, I think what they are doing is overstating and exaggerating what the intelligence shows,” Mr. Schiff said. Officials briefing the so-called Gang of Eight top congressional leaders never said that four embassies were targeted, he added. “In the view of the briefers, there was plotting, there was an effort to escalate being planned, but they didn’t have specificity.”
Supreme Court Blocks Citizenship Question From 2020 Census for Now
Trump administration’s official explanation for adding the question ‘seems to have been contrived,’ according to the majority opinion
WASHINGTON—A divided Supreme Court on Thursday prevented the Trump administration, for now, from asking U.S. residents on the 2020 census whether they are citizens, a considerable setback for the White House.
The court, in an opinion by Chief Justice John Roberts, didn’t issue a definitive decision finding the citizenship question unlawful, but it raised concerns about the Trump administration’s stated reason for adding the question to the census.
In strong language, the chief justice, joined by the court’s four liberal justices, said the administration’s official explanation “seems to have been contrived.”
The court sent the case back for more proceedings, leaving the 2020 census in a state of uncertainty—though if the deadline for finalizing the form is July 1, as census officials said this week, the question won’t be on it. However in at least one government filing, a census official gave the final date as Oct. 31.
Three different U.S. district judges have ruled that including the question was unlawful, with each finding that Commerce Secretary Wilbur Ross had not provided the public with his real reasons for doing so.
The Supreme Court’s ruling, which comes at a time of deeply divided immigration politics, could have considerable ramifications for the U.S. population count, as well as the drawing of congressional districts and the allocation of more than $600 billion in federal funds that are based on census data.
The census, mandated by the Constitution, counts all U.S. residents, regardless of citizenship or residency status.
A group of 18 states that sued Mr. Ross, as well as some career Census Bureau staffers, said adding a citizenship question would dampen response rates in immigrant-heavy communities, even in households with legal residents. If that happens, those communities could see a smaller piece of the federal pie, both in political representation and government funding.
The Trump administration said Mr. Ross, whose department oversees the Census Bureau, had the legal authority to include the question and determined that the benefits of having the citizenship data outweighed the potential of a lower response rate. It also pointed to earlier census surveys in the nation’s history that had asked about citizenship.
Mr. Ross’s explanations for adding the question have shifted over time. He and other Trump administration officials have said that census citizenship data would help the Justice Department with its efforts to comply with the Voting Rights Act, which protects minority voting rights.
Legal challengers in the case have said the administration’s reasons were the opposite—to dilute minority representation—and they said additional evidence has come to light recently that supports their claims. A Maryland federal judge this week said that evidence, which came from the files of a GOP political consultant who died last year, “potentially connects the dots between a discriminatory purpose—diluting Hispanics’ political power—and Secretary Ross’s decision.”
The evidence wasn’t directly before the Supreme Court when it took up the case, though it has received additional legal filings from both sides in recent weeks. New lower court proceedings are pending, though it isn’t clear what impact, if any, those will have after the high court’s ruling.
In April when the Supreme Court heard oral arguments on the census, President Trump said Americans deserved to know how many citizens were among those residing in their country.
Federal law prohibits the Census Bureau from sharing survey answers with federal immigration authorities, but a survey commissioned by the bureau last year found that asking about citizenship could be a substantial barrier to getting people to participate.
The whole country hasn’t been asked about citizenship on the decennial survey since 1950, but the government in recent years has asked a smaller sample of U.S. residents about their status.
The citizenship question touches on the broader immigration agenda that has been a central focus of the Trump presidency. Mr. Trump has barred travel by people from certain Muslim-majority countries—a ban the Supreme Court upheld last year. Mr. Trump’s administration also has attempted to limit immigrant claims for asylum; tried to cancel Obama-era benefits for illegal immigrants who came to the U.S. as children; and sought to build new barriers on the southern border. All of those efforts remain tied up in the courts.
Rudy Giuliani is the fool for our time
Rudy Giuliani started Tuesday in the manner Americans have come to expect of the president’s lawyer: He attacked former FBI director James Comey by tweeting a cartoon image of Bashful from Disney’s “Snow White.”
Giuliani deleted the tweet, and anyway, it’s not clear why he chose Bashful.
.. He had told CNN on Sunday that “no one signed” a letter of intent for Donald Trump to build a Moscow project. On Tuesday, CNN obtained the letter — signed by Trump.
Giuliani, asked by the New York Daily News to explain himself, said, “I don’t think I said nobody signed it.” Completing the reversal, he said “of course” Trump signed it: “How could you send it but nobody signed it?”
.. The “fool” has been a dramatic fixture at least since Shakespeare scribbled, and Giuliani is the fool for our time. Occasionally he speaks accidental truths, but mostly he plays the clown.
.. “Twitter allowed someone to invade my text with a disgusting anti-President message,” an alarmed Giuliani tweeted a few weeks ago, calling Twitter “card-carrying anti-Trumpers.” In fact, Giuliani had accidentally sabotaged his own tweet with a punctuation error — “G-20.In” — that automatically created a hyperlink to an Indian Web address. A clever observer quickly bought the domain and created a page that said “Donald Trump is a traitor.” Giuliani’s errant accusation was all the funnier because he’s also Trump’s “cybersecurity adviser.”
.. The former New York mayor, 74, has long been a loose cannon, asserting that there had not been any “successful Islamic terrorist attacks” during the George W. Bush administration, saying Trump’s travel ban was a legal way to do a “Muslim ban,” and predicting a “pretty big surprise” right before Comey reopened the Hillary Clinton email investigation. Alternately ill-informed and indiscreet, he’s just the guy you’d want as your lawyer.
.. Giuliani began as Trump’s lawyer in the spring by comparing FBI agents to “stormtroopers” and later claiming a law-enforcement informant was a “spy.”
.. He said he would charge special counsel Robert Mueller’s office “with a lance” to defend Ivanka Trump, but Jared Kushner is “disposable.”
.. He said Trump couldn’t be indicted as president even if he “shot” Comey.
.. He undermined months of Trump’s “no collusion” claims by proclaiming instead that “collusion is not a crime.”
He defended Trump on NBC’s “Meet the Press” by saying “truth isn’t truth.”
He admitted publicly that the June 2016 Trump Tower meeting was held “for the purpose of getting information about Clinton,” upending the official line that it was about adoption.
He suggested guilt when he told the Daily Beast “this was not a big crime” because “nobody got killed, nobody got robbed.”
And, days ago, he raised the possibility that associate Roger Stone gave Trump advance notice that WikiLeaks would release emails about Clinton stolen by Russia, saying “if” Stone had, “it’s not a crime.”
Clearly, some Giuliani dopiness is an effort to divulge damaging information gently. But he often makes matters worse.
.. Giuliani announced that Trump reimbursed Cohen for hush money to a porn actress. But he seemed baffled when told Cohen had claimed it was his own money: “He did?” Retreating, Giuliani said Trump wasn’t told about the payments, “but even if he was told, he wouldn’t have remembered it.” Further backpedaling, Giuliani said, “I’m not an expert on the facts” and issued a written statement “to clarify the views I expressed over the past few days.”
A similar mop-up came after Giuliani volunteered on TV that there had been a second meeting between Trump associates and Russians. Hours later, he said the just-referenced meeting “never happened.”
On Sunday, Giuliani was back to truth-isn’t-truth, telling ABC’s George Stephanopoulos that “unless you’re God . . . you will never know what the truth is” from Cohen. And Giuliani told Fox News’s Chris Wallace that Mueller would interview Trump “over my dead body — but you know, I could be dead.”
Perish the thought! We need Giuliani’s entertainment. But when he dies, there should be a memorable scene when he goes before the One Who Knows Truth.
“I didn’t lie,” Giuliani will say, “but even if I did, it wasn’t a crime to be Dopey.”
Comments:
I always felt Rudy used 9/11 more than actually helping... Need for money and attention, and significant cognitive decline due to age have brought about this sorry spectacle.
In the Trump WH age-related cognitive decline has a pretty good chance of passing unnoticed... Trump is the anti-King Midas... I’m sorry, but this column is mistaken. Giuliani is playing out his assigned role precisely as intended. Self-contradictions, deliberate falsehoods, apparent “misstatements,” bizarre tweets — all external hallmarks of Rudy’s boss, and Rudy’s a talented understudy. The purpose behind all this playacting is to distract and confuse, and it works. Trump continues to operate on the principle that the longer he can keep people shocked, off-balance, outraged, distracted, and confused, the longer he can rake in ill-gotten gains from his real aim: fleecing the American public. Giuliani has been recruited to assist in the Dept. of Misdirection.
The only fool thing Giuliani has done is to place the slightest reliance on Trump’s promise of whatever payback The Gilded Don has dangled in exchange for Rudy’s excellent diversionary stunts. A substantial group of construction subcontractors have learned, to their lasting pain and sorrow, what Trump’s promises are worth.
.. I agree. Fortunately, Giuliani has no power or authority so people just ignore his inane pronouncements. In the words of Jimmy Breslin, “Rudy Guiliani is a small man in search of a balcony.”.. I think you’re giving them both more credit than they deserve. IMHO Trump is just a bully and Giuliani really is just a fool. But hey, there’s every chance you’re right, I’m just not sure they are smart enough to be so devious... Trump, Giuliani, and Gingrich: The Three Wives Men.. Oh god another moron who thinks he is a stable genius. Surely Rudy’s third divorce is having an affect on him. And getting kicked out of his law firm for disgracing them with his idiocy, and having another exwife asking for more money, just has Rudy rattled. Please somebody remove this blight on the Constitution from our eyes and ears... I find it amazing that anyone would even have this man appear in front of any camera. If one lived in NYC when he was Mayor (as I did) you would know the truth about him.He was a Mayor whose interest was to clean up the parks by moving all the homeless out of them with nowhere to go. Put them in the streets with no plan.Did nothing for NYC education, nothing for housing, nothing for women’s or Gay rights and on and on.The final straw was this America’s Mayor standing in front of Grace Mansion and telling the world he was divorcing his then wife (Donna Hanover) to marry his mistress. Never telling her in person.What kind of man is this? He is exactly the clown you see today licking the boots of a President who like Rudy is a man without scruples and who lies on TV then is brought back to reality with proof that he spouts these lies and thinks he will get away with them. Todays world has everything recorded. Mr Giuliani please go back to your senior home and take your meds... Could it be that Rudy is really a secret double agent who actually works for Mueller? Every time he opens his mouth, Rudy digs the hole deeper for Trump... Very nicely done. The most puzzling thing about Giuliani is that he doesn’t have the self-awareness to realize that he looks foolish and he apparently doesn’t have anyone close to him who he trusts to tell him that he looks foolish either. He has chosen a very difficult role: mouthpiece for an habitually lying, narcissistic degenerate. Very few people could take that role and emerge with any dignity. In fact, most people with dignity would not take that role. Guliani will not be remembered as the Mayor of New York City during 9/11 nor as the U.S. Attorney who once tried to clean up Wall Street. He will be remembered as Trump’s tool, and as this piece says, as a fool... Mr. Rudolph Guiliani is second only to the TRumpster himself in making the TRumpster look guilty as sin.
The Tax-Cut Con
The advocates of tax cuts are relentless, even fanatical. An indication of the movement’s fervor — and of its political power — came during the Iraq war. War is expensive and is almost always accompanied by tax increases. But not in 2003. ”Nothing is more important in the face of a war,” declared Tom DeLay, the House majority leader, ”than cutting taxes.” And sure enough, taxes were cut, not just in a time of war but also in the face of record budget deficits. Nor will it be easy to reverse those tax cuts: the tax-cut movement has convinced many Americans — like Tinsley — that everybody still pays far too much in taxes.
.. A result of the tax-cut crusade is that there is now a fundamental mismatch between the benefits Americans expect to receive from the government and the revenues government collect. This mismatch is already having profound effects at the state and local levels: teachers and policemen are being laid off and children are being denied health insurance. The federal government can mask its problems for a while, by running huge budget deficits, but it, too, will eventually have to decide whether to cut services or raise taxes. And we are not talking about minor policy adjustments. If taxes stay as low as they are now, government as we know it cannot be maintained. In particular, Social Security will have to become far less generous; Medicare will no longer be able to guarantee comprehensive medical care to older Americans; Medicaid will no longer provide basic medical care to the poor.
.. The reason Tinsley’s comic strip about the angry taxpayer caught my eye was, of course, that the numbers were all wrong. Very few Americans pay as much as 50 percent of their income in taxes; on average, families near the middle of the income distribution pay only about half that percentage in federal, state and local taxes combined.
.. In fact, though most Americans feel that they pay too much in taxes, they get off quite lightly compared with the citizens of other advanced countries. Furthermore, for most Americans tax rates probably haven’t risen for a generation. And a few Americans — namely those with high incomes — face much lower taxes than they did a generation ago.
.. In the United States, all taxes — federal, state and local — reached a peak of 29.6 percent of G.D.P. in 2000. That number was, however, swollen by taxes on capital gains during the stock-market bubble.
By 2002, the tax take was down to 26.3 percent of G.D.P., and all indications are that it will be lower still this year and next.
This is a low number compared with almost every other advanced country. In 1999, Canada collected 38.2 percent of G.D.P. in taxes, France collected 45.8 percent and Sweden, 52.2 percent.
.. Meanwhile, wealthy Americans have seen a sharp drop in their tax burden. The top tax rate — the income-tax rate on the highest bracket — is now 35 percent, half what it was in the 1970’s. With the exception of a brief period between 1988 and 1993, that’s the lowest rate since 1932. Other taxes that, directly or indirectly, bear mainly on the very affluent have also been cut sharply. The effective tax rate on corporate profits has been cut in half since the 1960’s. The 2001 tax cut phases out the inheritance tax, which is overwhelmingly a tax on the very wealthy: in 1999, only 2 percent of estates paid any tax, and half the tax was paid by only 3,300 estates worth more than $5 million. The 2003 tax act sharply cuts taxes on dividend income, another boon to the very well off. By the time the Bush tax cuts have taken full effect, people with really high incomes will face their lowest average tax rate since the Hoover administration.
.. Yet a significant number of Americans rage against taxes, and the party that controls all three branches of the federal government has made tax cuts its supreme priority. Why?
3. Supply-Siders, Starve-the-Beasters and Lucky Duckies
It is often hard to pin down what antitax crusaders are trying to achieve. The reason is not, or not only, that they are disingenuous about their motives — though as we will see, disingenuity has become a hallmark of the movement in recent years. Rather, the fuzziness comes from the fact that today’s antitax movement moves back and forth between two doctrines. Both doctrines favor the same thing: big tax cuts for people with high incomes. But they favor it for different reasons.
One of those doctrines has become famous under the name ”supply-side economics.” It’s the view that the government can cut taxes without severe cuts in public spending. The other doctrine is often referred to as ”starving the beast,” a phrase coined by David Stockman, Ronald Reagan’s budget director. It’s the view that taxes should be cut precisely in order to force severe cuts in public spending. Supply-side economics is the friendly, attractive face of the tax-cut movement. But starve-the-beast is where the power lies.
.. So the standard view of economists is that if you want to reduce the burden of taxes, you must explain what government programs you want to cut as part of the deal. There’s no free lunch.
What the supply-siders argued, however, was that there was a free lunch. Cutting marginal rates, they insisted, would lead to such a large increase in gross domestic product that it wouldn’t be necessary to come up with offsetting spending cuts.
.. The other camp in the tax-cut crusade actually welcomes the revenue losses from tax cuts. Its most visible spokesman today is Grover Norquist, president of Americans for Tax Reform, who once told National Public Radio: ”I don’t want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub.” And the way to get it down to that size is to starve it of revenue. ”The goal is reducing the size and scope of government by draining its lifeblood,” Norquist told U.S. News & World Report.
.. Edwin Feulner, the foundation’s president, uses ”New Deal” and ”Great Society” as terms of abuse, implying that he and his organization want to do away with the institutions Franklin Roosevelt and Lyndon Johnson created. That means Social Security, Medicare, Medicaid — most of what gives citizens of the United States a safety net against economic misfortune.
.. The starve-the-beast doctrine is now firmly within the conservative mainstream. George W. Bush himself seemed to endorse the doctrine as the budget surplus evaporated: in August 2001 he called the disappearing surplus ”incredibly positive news” because it would put Congress in a ”fiscal straitjacket.”
.. to starve the beast, you must not only deny funds to the government; you must make voters hate the government. There’s a danger that working-class families might see government as their friend: because their incomes are low, they don’t pay much in taxes, while they benefit from public spending. So in starving the beast, you must take care not to cut taxes on these ”lucky duckies.” (Yes, that’s what The Wall Street Journal called them in a famous editorial.) In fact, if possible, you must raise taxes on working-class Americans in order, as The Journal said, to get their ”blood boiling with tax rage.”
.. The supply-side movement likes to present itself as a school of economic thought like Keynesianism or monetarism — that is, as a set of scholarly ideas that made their way, as such ideas do, into political discussion. But the reality is quite different. Supply-side economics was a political doctrine from Day 1; it emerged in the pages of political magazines, not professional economics journals.
.. That is not to deny that many professional economists favor tax cuts. But they almost always turn out to be starve-the-beasters, not supply-siders.
.. And they often secretly — or sometimes not so secretly — hold supply-siders in contempt. N. Gregory Mankiw, now chairman of George W. Bush’s Council of Economic Advisers, is definitely a friend to tax cuts; but in the first edition of his economic-principles textbook, he described Ronald Reagan’s supply-side advisers as ”charlatans and cranks.”
..Douglas Holtz-Eakin .. his conclusion was that unless the revenue losses from the proposed tax cuts were offset by spending cuts, the resulting deficits would be a drag on growth, quite likely to outweigh any supply-side effects.
.. since the 1970’s almost all of the prominent supply-siders have been aides to conservative politicians, writers at conservative publications like National Review, fellows at conservative policy centers like Heritage or economists at private companies with strong Republican connections. Loosely speaking, that is, supply-siders work for the vast right-wing conspiracy.
.. What gives supply-side economics influence is its connection with a powerful network of institutions that want to shrink the government and see tax cuts as a way to achieve that goal. Supply-side economics is a feel-good cover story for a political movement with a much harder-nosed agenda.
.. Irving Kristol, in his role as co-editor of The Public Interest, was arguably the single most important proponent of supply-side economics. But years later, he suggested that he himself wasn’t all that persuaded by the doctrine: ”I was not certain of its economic merits but quickly saw its political possibilities.” Writing in 1995, he explained that his real aim was to shrink the government and that tax cuts were a means to that end: ”The task, as I saw it, was to create a new majority, which evidently would mean a conservative majority, which came to mean, in turn, a Republican majority — so political effectiveness was the priority, not the accounting deficiencies of government.”
.. In effect, what Kristol said in 1995 was that he and his associates set out to deceive the American public. They sold tax cuts on the pretense that they would be painless, when they themselves believed that it would be necessary to slash public spending in order to make room for those cuts.
.. But one supposes that the response would be that the end justified the means — that the tax cuts did benefit all Americans because they led to faster economic growth. Did they?
.. skeptics say that rapid growth after 1982 proves nothing: a severe recession is usually followed by a period of fast growth, as unemployed workers and factories are brought back on line. The test of tax cuts as a spur to economic growth is whether they produced more than an ordinary business cycle recovery. Once the economy was back to full employment, was it bigger than you would otherwise have expected? And there Reagan fails the test: between 1979, when the big slump began, and 1989, when the economy finally achieved more or less full employment again, the growth rate was 3 percent, the same as the growth rate between the two previous business cycle peaks in 1973 and 1979. Or to put it another way, by the late 1980’s the U.S. economy was about where you would have expected it to be, given the trend in the 1970’s. Nothing in the data suggests a supply-side revolution.
.. Does this mean that the Reagan tax cuts had no effect? Of course not. Those tax cuts, combined with increased military spending, provided a good old-fashioned Keynesian boost to demand.
.. While the Reagan tax cuts didn’t produce any visible supply-side gains, they did lead to large budget deficits. From the point of view of most economists, this was a bad thing. But for starve-the-beast tax-cutters, deficits are potentially a good thing, because they force the government to shrink. So did Reagan’s deficits shrink the beast?
.. In response to these deficits, George Bush the elder went back on his ”read my lips” pledge and raised taxes. Bill Clinton raised them further. And thereby hangs a tale.
.. Clinton did exactly the opposite of what supply-side economics said you should do: he raised the marginal rate on high-income taxpayers. In 1989, the top 1 percent of families paid, on average, only 28.9 percent of their income in federal taxes; by 1995, that share was up to 36.1 percent.
Conservatives confidently awaited a disaster — but it failed to materialize. In fact, the economy grew at a reasonable pace through Clinton’s first term, while the deficit and the unemployment rate went steadily down. And then the news got even better: unemployment fell to its lowest level in decades without causing inflation, while productivity growth accelerated to rates not seen since the 1960’s. And the budget deficit turned into an impressive surplus.
.. By the end of the 1990’s, in other words, supply-side economics had become something of a laughingstock
.. the most striking example of what skillful marketing can accomplish is the campaign for repeal of the estate tax.
.. the estate tax is a tax on the very, very well off. Yet advocates of repeal began portraying it as a terrible burden on the little guy. They renamed it the ”death tax” and put out reports decrying its impact on struggling farmers and businessmen — reports that never provided real-world examples because actual cases of family farms or small businesses broken up to pay estate taxes are almost impossible to find. This campaign succeeded in creating a public perception that the estate tax falls broadly on the population. Earlier this year, a poll found that 49 percent of Americans believed that most families had to pay the estate tax, while only 33 percent gave the right answer that only a few families had to pay.
.. the public rationale for tax cuts has shifted repeatedly over the past three years.
.. During the 2000 campaign and the initial selling of the 2001 tax cut, the Bush team insisted that the federal government was running an excessive budget surplus, which should be returned to taxpayers. By the summer of 2001, as it became clear that the projected budget surpluses would not materialize, the administration shifted to touting the tax cuts as a form of demand-side economic stimulus: by putting more money in consumers’ pockets, the tax cuts would stimulate spending and help pull the economy out of recession. By 2003, the rationale had changed again: the administration argued that reducing taxes on dividend income, the core of its plan, would improve incentives and hence long-run growth — that is, it had turned to a supply-side argument.
.. So what were the Bush tax cuts really about? The best answer seems to be that they were about securing a key part of the Republican base. Wealthy campaign contributors have a lot to gain from lower taxes, and since they aren’t very likely to depend on Medicare, Social Security or Medicaid, they won’t suffer if the beast gets starved. Equally important was the support of the party’s intelligentsia, nurtured by policy centers like Heritage and professionally committed to the tax-cut crusade. The original Bush tax-cut proposal was devised in late 1999 not to win votes in the national election but to fend off a primary challenge from the supply-sider Steve Forbes, the presumptive favorite of that part of the base.
.. the selling of the tax cuts has depended heavily on chicanery. The administration has used accounting trickery to hide the true budget impact of its proposals, and it has used misleading presentations to conceal the extent to which its tax cuts are tilted toward families with very high income.
.. The most important tool of accounting trickery, though not the only one, is the use of ”sunset clauses” to understate the long-term budget impact of tax cuts.
.. But, of course, nobody expects the sunset to occur: when 2011 rolls around, Congress will be under immense pressure to extend the tax cuts.
.. the administration has carried out a very successful campaign to portray these tax cuts as mainly aimed at middle-class families. This campaign is similar in spirit to the selling of estate-tax repeal as a populist measure, but considerably more sophisticated.
.. the 2001 tax cut, once fully phased in, will deliver 42 percent of its benefits to the top 1 percent of the income distribution.
.. It might seem impossible to put a populist gloss on tax cuts this skewed toward the rich, but the administration has been remarkably successful in doing just that.
.. One technique involves exploiting the public’s lack of statistical sophistication. In the selling of the 2003 tax cut, the catch phrase used by administration spokesmen was ”92 million Americans will receive an average tax cut of $1,083.’‘ That sounded, and was intended to sound, as if every American family would get $1,083. Needless to say, that wasn’t true.
.. About half of American families received a tax cut of less than $100; the great majority, a tax cut of less than $500.
.. David Stockman famously admitted that Reagan’s middle-class tax cuts were a ”Trojan horse” that allowed him to smuggle in what he really wanted, a cut in the top marginal rate.
.. If a couple had multiple children, if the children were all still under 18 and if the couple’s income was just high enough to allow it to take full advantage of the child credit, it could get a tax cut of as much as 4 percent of pretax income. Hence the couple with two children and an income of $40,000, receiving a tax cut of $1,600
.. But while most couples have children, at any given time only a small minority of families contains two or more children under 18 — and many of these families have income too low to take full advantage of the child tax credit. So that ”typical” family wasn’t typical at all. Last year, the actual tax break for families in the middle of the income distribution averaged $469, not $1,600.
.. through a combination of hardball politics, deceptive budget arithmetic and systematic misrepresentation of who benefits, Bush’s team has achieved a major reduction of taxes, especially for people with very high incomes.
.. Alan Auerbach, William Gale and Peter Orszag, fiscal experts at the Brookings Institution, have estimated the size of the ”fiscal gap” — the increase in revenues or reduction in spending that would be needed to make the nation’s finances sustainable in the long run. If you define the long run as 75 years, this gap turns out to be 4.5 percent of G.D.P. Or to put it another way, the gap is equal to 30 percent of what the federal government spends on all domestic programs. Of that gap, about 60 percent is the result of the Bush tax cuts. We would have faced a serious fiscal problem even if those tax cuts had never happened. But we face a much nastier problem now that they are in place. And more broadly, the tax-cut crusade will make it very hard for any future politicians to raise taxes.
So how will this gap be closed? The crucial point is that it cannot be closed without either fundamentally redefining the role of government or sharply raising taxes.
.. Politicians will, of course, promise to eliminate wasteful spending. But take out Social Security, Medicare, defense, Medicaid, government pensions, homeland security, interest on the public debt and veterans’ benefits — none of them what people who complain about waste usually have in mind — and you are left with spending equal to about 3 percent of gross domestic product. And most of that goes for courts, highways, education and other useful things. Any savings from elimination of waste and fraud will amount to little more than a rounding-off error.
.. Let’s assume that interest on the public debt will be paid, that spending on defense and homeland security will not be compromised and that the regular operations of government will continue to be financed. What we are left with, then, are the New Deal and Great Society programs: Social Security, Medicare, Medicaid and unemployment insurance. And to close the fiscal gap, spending on these programs would have to be cut by around 40 percent.
.. It goes almost without saying that the age at which Americans become eligible for retirement benefits would rise, that Social Security payments would fall sharply compared with average incomes, that Medicare patients would be forced to pay much more of their expenses out of pocket — or do without. And that would be only a start.
.. All this sounds politically impossible. In fact, politicians of both parties have been scrambling to expand, not reduce, Medicare benefits by adding prescription drug coverage
.. I think within a decade, though not everyone agrees — the bond market will tell us that we have to make a choice.
In short, everything is going according to plan.
.. Some supporters of President Bush may have really believed that his tax cuts were consistent with his promises to protect Social Security and expand Medicare; some people may still believe that the wondrous supply-side effects of tax cuts will make the budget deficit disappear. But for starve-the-beast tax-cutters, the coming crunch is exactly what they had in mind.
.. In Norquist’s vision, America a couple of decades from now will be a place in which
- elderly people make up a disproportionate share of the poor, as they did before Social Security. It will also be a country in which
- even middle-class elderly Americans are, in many cases, unable to afford expensive medical procedures or prescription drugs and in which
- poor Americans generally go without even basic health care. And it may well be a place in which only
- those who can afford expensive private schools can give their children a decent education.