Dick Morris is the disgraced Republican former political strategist who gained a reputation for providing some backdoor political advice to Bill Clinton in 1995-96 before being caught sucking the toes of a hooker that he let listen in on his conversations with the President. Ever since, Morris has become a professional character assassin of Bill Clinton’s and a Fox News talking head who can be reliably counted on to oppose anything that Barack Obama does, reason or logic notwithstanding. But he is a known commodity and has a regular column in The Hill. The Hill is a DC-only newspaper—widely known in the Capitol, and almost unknown outside the Beltway. With a circulation of only 24,000, The Hill is read only by the handful of politicos in DC. It is basically the school newspaper for Congress.
Morris’s columns therefore are not intended to shape the public debate—the public simply does not read it. Instead, his columns are intended to influence Members of Congress. And in his latest column, he tries to tell Congress not to worry—the country can still pay its (important) bills if we hit the debt ceiling. Morris does some quick back of the envelope calculations, pointing out that we take in about $180 Billion per month in tax revenue and spend about $300 Billion. And, on average, this is not wrong. He then says that the debt service is $25 Billion per month, Social Security is $58 Billion per month, and the Defense budget is $28 Billion per month. I have not checked these numbers, but they are—on average—probably about right. His argument is obvious, if you add it up, that is $141 Billion in “important” spending, which tax receipts could cover. “You see,” he argues, critical services will keep going.
He must think the freshman Republicans he is writing for are complete idiots.
First, Morris is assuming that they will not notice the obvious flaw in his argument—that he is leaving off dozens of critical services: the Border Patrol which keeps the borders secure; the Bureau of Prisons which keeps criminals locked up: air traffic controllers which keeps planes flying; or TSA operations which keep terrorists off the planes. And he does not even mention the costs of Medicare and Medicaid payments needed to keep seniors alive. I doubt even the freshman Republicans are in support of illegal immigrants coming over the borders to free prisoners in order to hijack and crash airplanes and kill old people.
But Morris next argument—more subtle, but no less dishonest—is that he relies on the “average” revenues and outlays. The unfortunate reality is that the government does not run on averages.
Government revenues vary throughout the year. A variety of factors affect the timing—quarterly estimated payments are responsible for occasional spikes, and of course the biggest collections are in April when Tax Day comes.
The Financial Management Service of the US Treasury Department publishes a Monthly Treasury Statement showing the revenues and outlays on a monthly basis going back 30 years. In 2010, there were four months out of 12 where tax revenues dipped below $150 Billion, perilously close to the $141 Billion that Morris claims is needed to pay Social Security, defense, and debt service. And while not the weakest in terms of federal receipts, August has tended to be a relatively low revenue month (only $145 Billion in 2009). Meaning there is basically no room for any revenue to pay for anything else (even Medicare) in the near future. And if receipts are even lower (if economic conditions decline because of a precipitous stock market drop, or the government stops collecting airline taxes because Republicans block the reauthorization of the FAA), receipts might not even cover these services. Some months are even worse than that. February is consistently the lowest revenue (and largest deficit) month, with revenue in the last three years of $110 Billion, $107 Billion, and $87 Billion, $31 Billion, $34 Billion, and $54 Billion less than what is needed to cover what Morris considers the essential expenses. Conveniently, of course, John Boehner’s plan calls for us to hit the debt ceiling again in February.
While the argument based on the assumption that revenue is a constant might be appealing to a broad audience that does not follow the vagaries of federal money management, Morris’s column in this little-read newspaper is directed only at Congress—people whose job is ostensibly to have a basic grasp of federal budgeting. But Morris apparently thinks that freshmen Republicans are too stupid to understand this basic fact of money management—even as they stage protests on April 15 because it is the day they have to pay taxes. Even worse, he apparently thinks that their staff is too incompetent to do the most basic of research about federal money management. Put aside the fact that Congressional staffers can call up federal agencies and demand briefings on issues at any time, this information is posted on the Internet for the entire world to see.
I am not sure why Morris thinks that freshman Republicans are too dumb to see through his transparently false claims. But let’s hope he is wrong.
(Just a note for budget geeks—Outlays vary on a momthyl basis too, but the variance is considerably smaller. During FY 2009, the biggest spending month (July) was 37% higher than the lowest spending month (August), while the biggest revenue month (April) was 305% higher than the lowest month (February).)
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