All sides agree that the federal government borrows too much, so why exaggerate? In the latest example, a national TV ad shows an actor portraying a drug addict and claiming that the U.S. is borrowing 41 cents of every dollar spent, which isn’t true.
As shown in this chart, which we’ve produced from the most recent official figures from the Congressional Budget Office, the true figure was 36.1 cents of every dollar for fiscal year 2011, which just ended. And CBO projects that unless current law changes, that will drop to 27 cents in the current fiscal year, which began Oct. 1.
Those are truly awful numbers, and all sides agree they are too high and coming down too slowly. Yet many insist on exaggerating, as though the truth isn’t bad enough.
We’ve corrected Republican candidates on this point over and over, to little effect. Former New Mexico Gov. Gary Johnson claimed that “we’re borrowing 43 cents out of every dollar” in a debate on Sept. 22. Former Sen. Rick Santorum put the figure at 42 cents in a debate on Aug. 11. Rep. Michele Bachmann had it at 40 cents in a debate on Oct. 11.
Now comes a new release of a 30-second TV spot featuring yet another example of inflated and incorrect numbers, as though they came from the addled brain of a junkie like the one it features.
This ad started airing Nov. 13 on CNBC, CNN, Fox News Channel, Hallmark, Headline News, MSNBC, Weather Channel and locally throughout Washington, D.C., according to the sponsor. It was set to run until Nov. 23, the deadline for the so-called “supercommittee” of Congress to come up with a deficit-reduction plan. The sponsor is the Public Notice Research and Education Fund, a nonprofit group headed by veteran Republican operative Gretchen Hamel. It is a sister organization to Public Notice, an advocacy group also headed by Hamel.
Hamel told us the 41-cent figure was based on calculations from CBO figures from May. But those cover only the first portion of the fiscal year 2011 and not the entire fiscal year. Hamel’s calculation fails to take into account that federal tax receipts flow in at different rates each month, depending on such factors as when employers are required to remit their quarterly withholding payments. We pointed out the error to Hamel, but the ad continued to air, unchanged.
27 Cents This Year?
The ad would be correct to say that last year the government borrowed 36 cents of every dollar — but it’s nearly certain the figure will drop substantially this year, even if Congress takes no further action.
That’s because Congress and the president approved substantial spending cuts as part of the recent deal to raise the debt limit, for one thing. Deeper cuts are scheduled to take place automatically unless the “supercommittee” comes up with alternatives by next week.
According to CBO’s most recent Budget and Economic Outlook, issued after the debt deal was enacted, the figure will be around 27 cents for the current fiscal year, barring any changes in current law. And the Treasury Department’s own projections (Table 2, page 3) are a bit more optimistic, putting the figure at 26 cents on the dollar for all of fiscal 2012.
Either way, anyone who says the government is spending 40 cents on the dollar is using long outdated information, trying to make a bad situation look even worse than it is. And the 41-cent figure is just wrong. This year, we’re borrowing more like 27 or 26 cents of each dollar spent, depending on which projection is used.
– Brooks Jackson