Opinion

Somebody owes the Heritage Foundation an apology

By |
Opinion,Conn Carroll,Heritage Foundation

Disagreements happen all the time in Congress. It is a natural part of any democracy. But what doesn't happen all the time is a sitting senator essentially calling a witness a liar.

And that is exactly what Sen. Sheldon Whitehouse, D-R.I., did to Heritage Foundation scholar Dr. Salim Furth during a Senate Budget Committee hearing on June 4th titled, "The Fiscal and Economic Effects of Austerity."

During that hearing, Furth testified that "austerity" is an overly broad term often used to obfuscate the true mix of spending cuts and tax hikes governments use to lower their debt burdens. He said that while spending cuts can often improve economic growth, tax hikes only harm the economy and often make debt worse.

To bolster his claims, Furth cited data from the Organization of Economic Co-operation and Development (OECD) showing that, "to date, 'austerity' in Europe has consisted mainly of tax increases."

For example in France, where unemployment is currently at a 15-year high, taxes as a percentage of GDP rose 2.6 percent between 2007 and 2012. By anyone's definition that is austerity.

But during those same years, government spending as a percentage of GDP went up, not down, by 7.2 percent. That is in no way austere. And it cuts against everything Senate Budget Democrats are trying to do. Like France, Democrats want to hike spending and taxes.

So when Whitehouse got his turn to ask the witnesses questions, he lit into the Heritage expert. "Dr. Furth, I am very concerned about your testimony," Whitehouse began, "I am concerned that your testimony to this committee has been meretricious."

Whitehouse then produced a chart showing that, among other things, not only had France cut spending, which was the opposite of what Furth testified, but that France had cut spending far more than they raised taxes.

According to Whitehouse's chart, 53 percent of France's austerity measures have come from spending cuts compared to 47 percent from tax hikes.

"I am contesting whether you have given us fair and accurate information," Whitehouse continued. "When you look at the actual balance between spending cuts and tax increases, that the OECD uses it self, to describe what took place in Europe, I cannot connect that to where you come out."

Clearly, Whitehouse believed he had caught Furth and The Heritage Foundation in a bald face lie. So happy was Whitehouse with his work that his staff quickly fed video of the exchange to The Washington Post's Dylan Matthews, who then wrote a story on the exchange agreeing with Whitehouse.

That post was then picked up by New York Times columnist Paul Krugman, who wrote, "one does wonder, by the way, whether Heritage may at this point be destroying its own usefulness... Is there anyone not a committed right-winger who, at this point, believes anything coming out of Heritage?" (Disclosure: This writer worked at Heritage for three years as assistant director of strategic communications.)

There is just one problem with Whitehouse's big gotcha moment: The staffer who spoon-fed Whitehouse his OECD numbers on "the actual balance between spending cuts and tax increases" failed to also show Whitehouse the front page of the OECD report from which those numbers came.

That report is titled: "Fiscal consolidation targets, plans and measures in OECD countries."

Turns out, the numbers Whitehouse used to attack Furth for misreporting "what took place in Europe" were actually mostly projections of what governments said they were planning to do in the future (the report was written in December 2011 and looked at data from 2009 and projections through 2015).

At no point in Furth's testimony did he ever claim to be reporting about what governments were going to do in the future. He very plainly said his analysis was of actual spending and taxing data "to date."

Odds are that Whitehouse made an honest mistake. Senators can't be expected actually to read the title page of every report from which they quote.

But, considering he was the one who was very clearly in error, and not Furth, he owes Furth, and The Heritage Foundation an apology. Krugman and Matthews would be well advised to revisit the facts as well.

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