"A Case Study of CBPP's 1998 Analysis of the President's Budget."
CBPP, United States, 1998.
The annual budget process in the United States is underway, and the Center on Budget and Policy Priorities has produced various analyses relevant to the emerging debate. This is the story behind these reports and the approach we took to releasing them.
During our years of budget work, we have often produced an analysis of the President's budget proposal when it was submitted - often completing an initial piece on the same day it is introduced. Writing and releasing a "same day" piece is not easy and takes substantial preparation. Its principle value is that the media has an independent, credible analysis focused on the impact of the budget on low- and moderate-income families that it can use in preparing stories on the budget proposal. The stories written upon the release of the President's budget have significant influence in how the proposal is viewed by policymakers and the public at large. In essence, our analyses attempt to shape the budget debate at the onset of the process.
The Center's budget analyses are generally well received by policymakers, journalists and other national organizations for their timeliness, their accuracy and their nonpartisan nature. In some ways, these audiences depend on the Center's analyses to reveal what's behind the "spin" put on each budget proposal by the Administration releasing the budget. Producing a same day analysis was invaluable in establishing the Center as a critical resource for the budget debate and as a source of honest and reliable information and analysis on a variety of issues. The same day analysis was typically followed up with a longer more comprehensive analysis released a few weeks after the proposal was released.
In the 1980s and early 1990s, it was important to write a detailed analysis of key components of the Administration's budget proposals since they generally included deep reductions in a variety of programs for the poor. Administration officials would often maintain that they still protected the basic elements of programs for the poor. These claims were often inaccurate. The Center functioned as a kind of a "truth squad" on these proposals, assessing the accuracy of the claims.
In some recent years, we have decided that a comprehensive analysis of the President's budget may be less important than a different kind of report that is more thematic. This year is a good example.
Fiscal Year 1999 Budget Debate
With the passage of the 1997 Balanced Budget Act and the emergence of a budget surplus, a new budget era has dawned in the United States. This is the first time in 30 years that the United States' budget is in balance and that the policy debate is no longer largely about deficit reduction. Instead of being a blueprint on how to achieve budget balance, the President's proposal and the subsequent Congressional budget plans are thus focusing on how budget balance can be maintained and how new or expanded initiatives can be financed without leading to a deficit. Since our budget rules set up a zero sum game - the federal government cannot increase spending or decrease revenues without offsetting the costs - the debate is focused on how to divide up the existing budget and how to establish priorities for federal spending.
Starting in late January, the Administration intentionally leaked to the press almost on a daily basis some aspect of its upcoming budget proposal. For example, newspapers reported that the Clinton budget for fiscal year 1999 would include expanded funding for child care; a new initiative to reduce classroom size; and an expansion of the principle health care program for the elderly to allow participation at younger ages.
The reader might be thinking that the President must have financed these programs with the emerging budget surplus. But in a move that combined good policy with smart politics, the President proposed in his annual "State of the Union" speech before the Congress that the surplus should be preserved for Social Security reform, not for new tax cuts or spending. It was good policy because the Social Security system in the United States faces a long-term financing problem. It was good policy and smart politics because such a proposal from the President makes it difficult for Congress to use the surplus on less important priorities given the strong public support for the Social Security program.
The President insisted that any new spending in his budget would be fully financed either with other spending cuts or tax increases. When Clinton's budget plan was officially released, it became clear that the largest initiatives were to be financed by an increase in cigarette taxes. This approach would reduce smoking, especially among young people, and at the same time pay for important programs. In addition to the tobacco tax, the Clinton budget also proposed to eliminate certain tax loopholes that benefitted particular industries or types of income.
"Big Government"
While the deficit was no longer an issue, the response of many Members of Congress (the U.S. Congress is controlled by the Republican party while President Clinton is a Democrat) underscored their continued push for more tax cuts and for less federal spending. They argued that the Clinton proposal would return the United States to an era of "big government," a term used here to imply an era of large and excessive government spending. The leader of the U.S. Senate framed the argument as follows: "the choice is between big government or families, more taxes or more freedom." The arguments advanced in Congress left many with two false impressions: first, that the plan would substantially increase the size of the federal government and second, that the new initiatives were not fully financed by other spending cuts or tax increases.
Rather than analyze the individual program initiatives contained in the Clinton proposal, our organization decided it would be more effective to address the general question of whether the proposed budget would significantly enlarge the government. So much information had already come out in the press about the specific programs in the budget that there was little else to say about them. We also knew that Congressional arguments were motivated in large part by the goal of enacting further substantial tax cuts. We were skeptical of the merit of such cuts. The 1997 law to balance the budget, ironically, included hundreds of billions of dollars in tax cuts - most of which will benefit upper-income households. Further tax cuts, in our view, would only exacerbate the long-term deficit and likely widen income disparities. Finally, our decision to address the big government argument stemmed from a desire to correct misleading figures used by certain researchers and leaders. These figures were being used to undermine modest proposals to increase domestic spending on programs assisting families in need, as well as modest increases in other investments or initiatives.
Center Budget Analyses
Over the course of a week, we released a series of analyses on the Clinton budget proposal. In each case, the analysis was aimed at a specific audience, released at a particular time to secure the greatest impact and news coverage, and designed to address a particular issue in the emerging budget debate.
On Tuesday, January 27 - six days before he released his budget proposal for the next year - the President gave his annual State of the Union speech. He highlighted the major themes and initiatives in his budget. As the New York Times reported on January 29th, the budget debate thus began: "Republican Congressional leaders today began a battle against President Clinton's new agenda, saying his spending proposals would revive the era of a big government that he so dramatically declared dead just two years ago."
Our analysis and our distribution process included the following steps:
1. The first of the pieces to show that the Clinton Administration was not proposing a "big government" was released that Friday. The report was aimed specifically at journalists who would be writing weekend stories on the State of the Union and the President's budget and, in particular, at television commentators who appear on weekly Sunday news programs and would be discussing the budget as well. Prominent columnists and commentators, including those for the Wall Street Journal and USA Today, used the piece as background for their coverage.
2. A second analysis also was released on Friday that was designed to address the arguments for further tax cuts. "Taxpayers Will Have New Tax Cuts Even If No Additional Reductions Are Enacted" laid out the tax cuts enacted last year which had effective dates in future years. This means that taxpayers will receive new tax cuts in most of the next ten years even if no additional tax cuts are enacted this year.
3. That Monday, the Administration released its budget. The Center picked up copies of the Administration's budget materials as soon as they were made available and sent interns to attend key budget briefings being held that day by the federal agencies. Center analysts crafted a "same day" budget piece, which in part was based on the budget piece released the previous Friday but also examined the newly released details from the Administration's budget. The Center was able to respond the same day by gathering bits and pieces of information from available source and by anticipating some of the themes of the budget. The Center targeted this analysis, "Federal Government Would Continue to Consume Less of Economy Under Administration's Budget," to the influential and highly-informed Washington based journalists and Congressional staffers who would shape the early framing of the budget debate. With that in mind, the Center kept the piece short so it could be easily assimilated into press coverage, and did not provide the more extensive background and context for budget issues that would be needed in reports for a broader national audience. As the piece was being written, Center media staff fielded press calls from budget and political reporters seeking our analysis. Reporters from a number of national news organizations received the piece that afternoon and interviewed Center analysts before their writing deadlines.
4. After initial distribution to these elite Washington insiders, the Center prepared to issue longer, more detailed reports suitable for broader national audiences and the editorial writers and columnists whose analyses and "think" pieces would further shape public opinion and debate across the country. These pieces would also be critical to Congressional budget and legislative staff who were evaluating and writing their own detailed statements and analyses of the Clinton budget. Analysts at nonprofit and advocacy groups would also use these new detailed reports on the budget in their own work. One report was called "How Big Is the Federal Government - And Would the Administration's Budget Make It Bigger?" It found that "government spending as a share of the economy is now at one of the lowest levels in recent decades and would decline further in the next few years both under current policy and under the Administration's budget." The report detailed the financing mechanisms included in the budget to pay for new or expanded programs. It included a detailed discussion of the proper way to measure the size of the federal government both in terms of expenditures as well as in taxes.
5. We followed up with a somewhat longer edition of the same day budget piece, titled "Federal Government Would Continue to Consume Less of Economy Under Administration's Budget: Tax Burdens Would Edge Down Slightly." This analysis found that the Administration's budget includes initiatives that are quite modest in size - as well as spending reductions in other federal programs. A second issue was addressed: the impact of the budget on federal revenues and on the tax burdens of typical families. Both of these pieces were distributed more widely than the earlier pieces: to the media, to policymakers, to other national organizations, and our subscription list.
The piece included a box on page three (a box was used to set off the information we wanted to highlight) that has an interesting story behind it. We noticed that some press accounts of the President's budget that appeared the day after it was released included a charge by some members of Congress that the budget contained "an extra $150 billion" in spending. That same day we happened to be doing briefings for some Members of Congress who had invited us to present our analysis of the Clinton budget. In addition to giving them our same-day analysis, we prepared for these sessions a short two-pager debunking this figure as inflated and inaccurate. The piece demonstrated how the $150 billion figure was derived and the problems with this calculation. We decided to incorporate a summary of this piece in the second overall budget analysis we did. Of note, this "$150 billion" charge virtually disappeared from budget reporters' stories.
In general, all the Center's major analyses are posted on the Internet. In this case, prior to the Monday when the Administration released its budget, we alerted potentially interested parties that our report would be posted to the site the day of the release. Thus, media, policymakers, and other web sites with whom we have a formal or informal relationship anticipated the release of the electronic version of the analysis. This advance alert substantially increased the traffic to the site, and the web site was accessed several thousand times that day.
Upon completion, the subsequent report, "How Big Is the Federal Government - And Would the Administration's Budget Make it Bigger?" was immediately posted to the Center's web site. It was picked up as a featured "link of the day" on many other policy web sites.