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Fact & Fiction
1-20-04

2 Whoppers Made by President Bush in Past State of the Union Addresses

NB: This article was first published January 20, 2004.

President Bush has made two serious misstatements of fact in his State of the Union addresses.

Iraq Sought Uranium in Africa (2003)

The more widely known mistake was the president's claim in 2003 that"The British government has learned that Saddam Hussein recently sought significant quantities of uranium from Africa." As Bush subsequently acknowledged, there was no evidence that Iraq had sought or obtained uranium from Africa.

In 2002 Joseph Wilson, the last ambassador to Iraq, had been dispatched by the CIA to Africa to investigate media reports that indicated Iraq had purchased uranium from Nigeria. He found that the reports were untrue. When his investigation became known an uproar ensued and Democrats called for an independent probe of Bush's claims. In July 2003 Sen. Carl Levin (D-Mich.) demanded to know"why, as late as the president's State of the Union address in January 2003, our policymakers were still using information which the intelligence community knew was almost certainly false." The White House was thrown further on the defensive later in the summer after columnist Robert Novak outed Wilson's wife as a CIA operative. The media speculated that someone in the White House had leaked her identity to Novak in an attempt to silence Wilson. The Justice Department subsequently opened an investigation into the source of the leak. Recently, Attorney General Ashcroft recused himself from oversight of the investigation, which he placed in the hands of the U.S. Attorney in Chicago.

Off by $700 Billion (2001)

In his 2001 State of the Union Address -- which the White House insisted was actually a budget address, though the media referred to it as a State of the Union Address -- President Bush outlined his administration's plan to ask for a $1.6 trillion tax cut over ten years. The size of the tax cut alarmed many pundits and deficit hawks. The administration argued that the government expected to run a surplus of $5.6 trillion over the coming decade and could therefore afford a sizeable tax cut. Democrats wanted to use the surplus to pay down the national debt of $3.2 trillion. But in his speech President Bush argued that $1.2 trillion dollars in debt could not be paid off early because the money was owed on long-term bonds. Hence, that money could be used to pay for the tax cuts.

Ron Suskind reveals in The Price of Loyalty: George W. Bush, the White House, and the Education of Paul O'Neill, that Secretary O'Neill had pointed out to the White House in advance of the address that only $500 billion of the national debt could not be paid off early. President Bush had made a $700 billion mistake.

From The Price of Loyalty

Richard Stevenson's [New York] Times story revealed one item the President would be addressing that night in his State of the Union: over the next ten years the United States could pay down only $2 trillion of the $3.2 trillion of debt--once the $2.4 trillion of Social Security surplus was set aside. Specifically, the White House would contend that $1.2 trillion of the debt would not be able to be paid down largely because it matured after the ten-year period.

There was a clear inference: if we can't use $1.2 trillion of the surplus to do what both Democrats and Republicans have been advocating for much of the 1990s--pay down the federal debt--we might as well give it back in the form of a tax cut.

The story's key quote came from Gary Gensler, the undersecretary for domestic finance under Clinton--and the official who had so ably handled O'Neill's debriefing during the transition. Gensler, a former investment banker and head of bond trading at Goldman Sachs, said there were a variety of ways to replace the long bonds--mostly thirty-year Treasury notes--with rolling buybacks and purchase replacements. The amount that would be difficult to buy back would be a maximum of $500 billion, not $1.2 trillion.

O'Neill quickly huddled in a conference room with assistant undersecretaries."Gensler's right, isn't he?" Nods all around. None of them had been consulted. It was a mistake of nearly $700 billion."What do you mean, no one was consulted?" O'Neill moaned.

Over the next hour, the path of this gremlin was revealed. A mid-rung career analyst at OMB had worked up a paper on the so-called payback problem--extrapolating from a more general, academic footnote in the final budget submitted by Clinton upon his exit--and then passed it north to his bosses at [the Office of Management and Budget] OMB. Delighted at what seemed to be added justification for the tax cut, they passed it over to the President's speechwriting team and political staff-led by Karl Rove and Karen Hughes .... Fearful of leaks, and distrustful of the agendas of expert staffers in the various departments, they had circulated final drafts of the State of the Union to almost no one outside the West Wing....

Treasury staffers called the White House. Excerpts of the State of the Union, which included the flawed calculus, had already been disclosed to the press. It was too late.

O'Neill was incensed. How could the White political staff"decide to do things like this and not even consult with people in the government who know what's true or not? Who the hell is in charge here?" he ranted."This is complete bullshit!"

That night, Bush stood before the nation, described the state of the Union in the most important speech a president gives, in any given year, and said something that knowledgeable people in the U.S. government knew to be false.