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The formative experience of my political life was the 2000 presidential campaign, in which the media mercilessly persecuted Al Gore over a series of trivial exaggerations and now-forgotten pseudo-scandals while giving George W. Bush a pass on the fact that the central premises of his economic agenda were lies.
People too young to remember the campaign may wonder how Bush persuaded the country that budget-busting tax cuts for the richest Americans were the prescription the country needed. The answer is that he simply misdescribed his plan. In speeches, in televised debates, and in advertisements he represented his plan as consistent with a continued budget surplus and as primarily benefiting middle-class taxpayers.
Bush won the election and enacted hundreds of billions of dollars in tax cuts. Surpluses turned into deficits, and the promised economic boom never materialized.
None of this was surprising or unpredictable to anyone who cared to dig into the details. The problem was political reporters had found those details much less interesting than snarking about Al Gore's wooden speaking style and complaining that his "demeanor" was disrespectful during a debate exchange in which Bush repeatedly attacked Gore with bogus math.
Journalism failed in 2000
According to the conventions prevailing at the time, to offer a view on the merits of a policy controversy would violate the dictates of objective journalism. Harping on the fact that Bush was lying about the consequences of his tax plan was shrill and partisan. Commenting on style cues was okay, though, so the press could lean into various critiques of Gore's outfit.
Today it's clear that Jeb Bush is very much his brother's successor, both in terms of a love of regressive tax cuts and in terms of a passion for making the case for them in a dishonest way. And reading mainstream political reporters characterize the Jeb tax plan as "populist" or some kind of break with conservative orthodoxy paired with endless front-page coverage of every new micro-development in the Hillary Clinton email inquiry is giving me a very uncomfortable sense of déjà vu.
The good news is that new policy-focused verticals like the Upshot and Wonkblog at the New York Times and the Washington Post are doing a much better job of covering this round of Bush tax cuts. The bad news is that policy-focused coverage of presidential campaigns remains a specific and at times marginalized silo. There is not yet any sense that Bush's economic plans — and his sales job of those plans — should speak in a central way to how we understand his character, his judgment, his ethics, and his overall quest for the presidency.
Jeb Bush's three-legged stool of bogus arguments
Thus far this year, America's collective journalistic manpower has spent a lot more time and energy on scrutinizing Clinton's emails than on scrutinizing the content of Bush's economic policy. And that's a lucky thing for him, because what he's put out there is an appalling edifice of flimflam based on three claims that don't withstand cursory examination:
- Jeb Bush claims his tax program is motivated by a belief in the "right to rise" and a desire to obtain social mobility for the poor.
- Jeb Bush claims his tax program will help the country achieve an average annual growth rate of 4 percent.
- Jeb Bush claims Florida during the Jeb years represents an economic policy success story that he can take nationwide.
But before we delve into the details of this, consider one small signpost of Bush's dishonesty on taxes — his plan includes a large tax cut that primarily benefits not the top 1 percent but the top 0.1 percent, and he just left it out of the initial media push entirely.
Specifically, his plan includes a cut in the top marginal tax rate for capital gains income from 23.8 percent to 20 percent. It also cuts the top marginal tax rate for dividend income by the same amount. And it cuts the top marginal tax rate for income derived from interest on bonds from 39.6 percent way down to 20 percent.
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As the richest 0.1 percent of the population obtains almost half of the capital gains income in the country, these are shifts that overwhelmingly benefit the wealthy few. And yet in a Tuesday evening Wall Street Journal op-ed laying out his tax plan, Bush simply failed to mention any changes to capital gains, dividend, or interest tax rates. Thus he generated a whole slew of day one stories that simply forgot to mention the most regressive part of the plan.
Bush's tax program is not about social mobility
George W. Bush was a "compassionate conservative" who happened to want to funnel hundreds of billions of dollars in tax cuts to the wealthiest Americans. Jeb Bush's version of this is his alleged passion for upward social mobility. When he gets billionaires to write six- and seven-figure checks to finance his presidential aspirations, they are donating to a political organization named Right to Rise.
The second paragraph of his tax proposal describes this as the central animating purpose of the reform: "Restoring the right to rise in America requires accelerating growth, and that can’t be done without a complete overhaul of the U.S. tax code."
And yet, the tax program contains the following provisions:
- A family with $500,000 in taxable wage income will get a larger tax cut than a family with $50,000 in taxable wage income. A family with $5 million will get an even bigger one.
- Heirs to multimillion-dollar fortunes will receive a large tax cut.
- A multinational company that shift profits to foreign subsidiaries will be able to permanently avoid paying taxes on those profits
- A multination company that engaged in past profit shifting to defer paying corporate income tax will be rewarded for its bad behavior with a retroactive tax amnesty.
- A person who owns so much stock that he has maxed out his existing tax-advantaged saving accounts will get a tax cut.
None of this is shocking stuff, of course. It's widely held Republican doctrine that the executives and owners of large business enterprises and their heirs are overtaxed in the United States. But this simply underscores the fact that there is no distinctive "right to rise" policy agenda in the Jeb Bush playbook. Like Mitt Romney and like his brother, Jeb believes a big problem in the United States is that the take-home pay of the top 1 percent of the population is too low.
Bush's Florida model is a disaster
Bush says we should judge the merits of his plan by looking at his record in his home state of Florida.
"I know that enacting these policies works because I’ve done it before," he writes, "As governor of Florida, I cut taxes every single year—returning a total of $19 billion to Floridians. The state’s economy took off, growing at an average rate of 4.4%."
The truth about Florida under Bush is that his two terms in office perfectly coincided with a massive, unsustainable boom in house prices.
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Did Jeb's tax cut policies create prosperity in Florida by causing the housing bubble to inflate? That seems unlikely, but even if it's true it refutes rather than supports the case that the Florida model can be usefully exported nationwide.
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House prices can't just rise and rise and rise forever at that kind of clip. And when Florida's house price boom turned bust, it took the whole economy down with it. Florida's inflation-adjusted GDP has still not recovered to its bubbly peak. Bush says the success of Florida's economy validates his policies, but Florida's economy hasn't been successful.
Bush's 4 percent growth goal is a joke
In Bush's telling, his tax program is part of an agenda to achieve "sustained 4% economic growth."
He offers no evidence that growth on that scale is achievable other than to cite Florida's rapid — and not remotely sustained or sustainable — economic growth during the bubble years.
What's more, Bush doesn't mention that Florida's growth looks much less impressive when judged on a per-person basis. Florida, you see, has a population that's been growing much faster than the overall US population.
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This is a fine thing for a governor of Florida to brag about (people like Florida!), but it poses a serious challenge for Florida as a national model. The Sunshine State's population grows fast because people like to move there from other, colder places. There's simply no way for the US as a whole to replicate the internal migration on which Florida's 4 percent growth was based.
The origins of the 4 percent goal confirm that it's basically nonsense:
That ambitious goal was first raised as Bush and other advisers to the George W. Bush Institute discussed a distinctive economic program the organization could promote, recalled James Glassman, then the institute's executive director.
"Even if we don’t make 4 percent it would be nice to grow at 3 or 3.5," said Glassman, now a visiting fellow at the American Enterprise Institute. In that conference call, "we were looking for a niche and Jeb in that very laconic way said, 'four percent growth.' It was obvious to everybody that this was a very good idea."
Jeb Bush's tax program is a big deal
The plan, as currently released, is not sufficiently detailed to permit credible independent scoring. But even four economists handpicked by Bush's team to analyze it say that under standard methods it would reduce federal revenue by about $3.4 trillion over its first 10 years. That's trillion with a T. Which is to say that if you had a stack of a billion dollars, you would need to add 3,399 more billion-dollar stacks to equal the cost of this program.
To get a sense of the scale, consider the following big government liberal proposals:
- Create subsidized job opportunities for 80,000 adults per year ($10 billion)
- The Center for American Progress' plan for high-quality day care ($40 billion)
- A bipartisan plan to boost the EITC to help the working poor that's held up in Congress because of disagreement on how to pay for it ($60 billion)
- Barack Obama's proposal for universal preschool ($75 billion)
- Eliminate the Highway Trust Fund fiscal gap ($168 billion)
- Hillary Clinton's plan for debt-free college ($350 billion)
- A national high-speed rail network ($500 billion)
- End sequestration, and adopt the Congressional Progressive Caucus's wish list of domestic discretionary funding increases ($1.9 trillion)
Sounds pretty ridiculous, right? Especially if you don't specify how you are going to pay for it. But it all adds up to only $3.1 trillion in new budgetary commitments. Read too quickly and the difference between $3.1 trillion and $3.4 trillion can seem like just a decimal point, but $300 billion is a lot of money, even spread across 10 years. So much that it would be enough to add in the $30 billion a year it would take to end hunger globally.
Obviously, a person is free to believe that delivering a large tax cut to owners of corporate bonds will do more to boost social mobility than providing preschool to poor children, or that reducing the tax burden on people who inherit $10 million estates is more morally urgent than reducing global malnutrition. The point is simply that Bush is proposing a very significant financial commitment — one whose rollout to the public was fundamentally dishonest, featuring sins of both omission and commission. The details and underlying rationale of this program are worthy of at least as much scrutiny as State Department email protocols. The precedent from 15 years ago is not encouraging, but a lot has changed in the media landscape since then, so it's too early for total despair.
