Secretary Snow testified before the House Appropriations Subcommittee on Transportation, Treasury, and Housing and Urban Development, the Judiciary on Wednesday:
The economic indicators since the President signed the Jobs and Growth Act in May 2003 provide validity to this notion. Since that time, we have seen eleven straight months of positive business investment; nearly five million jobs have been created; the unemployment rate stands at a remarkable 4.8 percent; and now we are also seeing a rise in American’s income and wealth. What’s also impressive is the fact that tax revenues are surging; federal revenues for Fiscal Year 2005 totaled $2.15 trillion – the highest level ever.
President Bush decided to tout the employment news today:
Good morning. This morning’s economic report shows that America’s growing economy added 211,000 jobs in the month of March. The American economy has now added jobs for 31 months in a row, created more than 5.1 million new jobs for American workers. The unemployment rate is now down to 4.7 percent – that’s below the average rate of the 1960s, 1970s, 1980s and 1990s.
So the President starts with that old canard of comparing the average unemployment rate during the 1990’s to last month’s rate – forgetting to tell people that unemployment fell during almost all of the Clinton’s years and was below 4% by the end of 2000. You had to wonder what the next set of lies would be from President “I’m not a shoplifter” Bush:
The economy has expanded for 17 straight quarters. And last year the American economy grew at a healthy rate of 3.5 percent. That’s the fastest rate of any major industrialized economy. These gains are the result of the energy and the effort of American workers, small business owners and entrepreneurs. They are also the result of pro-growth economic policies. The tax cuts I signed left $880 billion with our nation’s workers, small business owners and families. They’ve used that money to fuel our economic resurgence. Not everyone in Washington agreed with the decision to let people keep more of their own money. On the day that Republicans in the House and Senate were finalizing the 2003 tax cuts, one Democratic leader said these cuts would “do nothing to create jobs.” Facts have proven the critics wrong 5.1 million times over. Tax relief has done exactly what it was designed to do – it’s created jobs and growth for the American people. Yet some are now proposing that we raise taxes, either by repealing the tax cuts or letting them expire. These are the same politicians that told us that letting Americans – letting America’s working families keep more of their own money would be irresponsible, reckless and shameful. They were wrong then, and they are wrong now. Our economy grows when the American people make the decisions about how to save spend and invest their money. To keep our economy creating jobs and opportunity, Congress needs to show its trust in the American people and make the tax relief permanent. Congress also needs to restrain spending so we can stay on track to cut the deficit in half by 2009. And if necessary, I will enforce spending restraint through the exercise of the veto.
We would have drawn closer to full employment after the summer of 2003 even without the 2003 tax change. As far as giving people their money back – just remember that all of those massive General Fund deficits represent a deferred tax liability. As far as restraining spending – even conservatives realize this is a bald-faced lie.
Update: AB reader Holly W. is challenging Sec. Snow’s claim that we have the highest level of Federal tax revenues ever. She rightly asks how does this compare in per capita terms or relative to GDP? Even President Bush was careful to compare figures after “adjusting for inflation”, but not his Treasury Secretary. Putting aside Holly’s excellent questions for a second, my math says nominal tax revenues were up only 8.4% from five years ago (2005 v. 2000) where as the general price level had increased by 12.2%. So real tax revenues fell even in absolute terms. Of course, population and real GDP both grew a bit. Given that John Snow had a Ph.D. in economics, one has to wonder why he claimed we had record levels of tax revenues. Holly – thanks for bringing this up!