Crazy Headlines

No, it’s not a bit from Jay Leno, it’s today’s NYT: “$318 Billion Deal Is Set in Congress for Cutting Taxes“. From the story [emphases mine]:

  • The measure would reduce the tax rate on capital gains and dividends to 15 percent for most taxpayers for five years, and then reinstate the higher existing rates in 2008. Republicans have said they hope to extend the tax cut before it expires.
  • Once it was clear that Mr. Voinovich was a swing vote on the bill, he was invited into the meeting with the vice president and asked pointedly what it would take to get his vote. The senator’s spokesman, Scott Milburn, said Mr. Voinovich told the negotiators that he would support the bill only if its final cost was no more than $350 billion over 10 years, including the aid to states and other tax credits.
  • Mr. Thomas had until recently bitterly criticized such sunset proposals as gimmicky, and he had also said he was adamantly opposed to assistance to state governments who, he said, had caused their own financial problems. [AB note: I agree with Thomas on that last point]
  • “In the long run, the bill will not cost $350 billion or $550 billion, but it will really cost a trillion dollars or more,” said Representative Charles B. Rangel of New York, the ranking Democrat on the Ways and Means Committee. “And all of it is borrowed money which increases the national debt.”
  • Mr. Grassley, among the most genial members of Congress, has said all year that he was not as concerned about the particular aspects of tax legislation this year as he was over finding a package that could get 50 votes.

Now, due respect to the reporters, David Rosenbaum and David Firestone, who write the story, not the headline. But for anyone at the Times to title this story with the phrase “$318 Billion”, when every paragraph implicitly or explicitly says that the true cost is way above that? Just because the reporters don’t write the headline shouldn’t mean that Karl Rove gets to.

And what the hell kind of logic is Grassley applying? The details don’t matter? If it’s a freaking stimulus, then nothing but the details matter. Here are some details Grassley could think about: Is it in fact stimulative, Chuck? What will massive deficits do to future tax rates? What happens when the Baby Boomers retire? Will debt service crowd out future investment? F it, who cares. Will it get 50 votes? That’s what is important. Thank God Grassley is so damn genial.

There appear to be some progressive elements in the package, though the story neither says how they got there nor gives much detail. The child credit–largely progressive because it’s a lump sum–has a two year sunset, though:

The package would also put into effect this year lower tax rates for middle- and upper-income taxpayers that were not scheduled to become effective until 2006. For the next two years, it would give a tax break to married couples, and increase the tax credit for children to $1,000 per child from $600 for all but the wealthiest families….Beginning in about six weeks, less money would be withheld from workers’ paychecks to reflect the lower tax rates, and checks worth $400 per child would be mailed to 25 million families.

I went to CNN for more details. I didn’t find any new details on the plan there, but I did get a chuckle:

“If they stay within the 350, I’m fine,” Voinovich said. “I appreciate the fact that they’ve been trying to honor my concerns and make me an honest man.”

I’m going with Matt Yglesias’ assessment on Voinovich.

In another post, Yglesias takes exception to the NYT’s assessment that this is a “substantial political victory” for Bush, contending instead that it’s a “total surrender to Senator Voinovich”. I disagree. Come next year, Bush can either say “thankfully we were able to push this plan through and enact some dividend and capital gains tax cuts” if the economy is strong, or he can say “if we had been able to pass my larger tax cut, then the economy would be better right now.” And who will refute that? The New York Times? Don’t bet your lunch money.


P.S. Matt’s got another instance of misleading-at-best phrasing from today’s NYT. Much more of this and I’ll start reminiscing about the good old Jayson Blair days.