BROOKE GLADSTONE:
And I'm Brooke Gladstone. The media love parsing the president's words after a State of the Union Address, but they're much less entranced by the much more important ritual that follows a few weeks later. I refer, of course, to the arrival of the president's proposed federal budget. Who can blame them? Parsing numbers is a long, hard slog, especially when they're tucked into a 2,500-page behemoth of a book that is virtually unreadable.

Every year, between the time the White House offers its version and congress counters with its own, reporters struggle to find the story in the bickering over tax cuts, revenue streams and deficit spending. And every year, economist Dean Baker shakes his head at the results. He's the co-director of the Center for Economic and Policy Research, and he says most budget stories lose average readers in a bewildering thicket of millions, billions and trillions.
DEAN BAKER:
Basically, unless you're a budget wonk, you hear that we're spending, you know, 460 billion on the defense budget next year – that doesn't mean anything to you. It could be 450 million, it could be 4.6 trillion. These are not terms we're used to.
BROOKE GLADSTONE:
So what's a reporter to do?
DEAN BAKER:
Put these numbers in context so that it would be meaningful for people. If you put those numbers as a percent of the budget, people would immediately know this is a big deal or it's a small deal. So if you're talking about the defense budget – President Bush is proposing 480 billion for next year - tell your readers that's 17 percent of the budget.
BROOKE GLADSTONE:
Isn't it nearly twice as much as that, 700 and something if you add in the supplemental?
DEAN BAKER:
If you add that in, yes, yes, and then in that case, you're talking about somewhere on the order of about 23, 24 percent of the budget, but in any case, you know, those are numbers that immediately say, okay, this is a big deal.

Public opinion polls regularly show that people think that programs like welfare and foreign aid account for a very large share or even the majority of the budget, when in reality, even if you interpret welfare programs very liberally, you're only talking about four, at most five percent of the budget. Foreign aid is less than half of one percent of the budget.

And that's the sort of thing that if we just had better reporting, people would at least understand this is not a big deal in terms of their tax dollar. And they may still think it's a bad way to spend the money, but they would know that's not going to affect what they have to pay every April 15th.
BROOKE GLADSTONE:
I brought up the fact that the Defense Department appropriation request is actually much larger than it appears because it seems sometimes reporters don't add the relevant numbers together. And when the president submits a budget, if he breaks it up into a lot of little pieces, it doesn't look as big as it actually is.
DEAN BAKER:
Well, that's right. I mean, there's a lot of tricks that have gone on with the budget, so certainly the way the wars in Afghanistan and Iraq have been paid for, primarily through supplemental appropriations, makes it very difficult for people to understand how much is going to defense and those wars.

Another thing that comes up all the time – it's certainly already been discussed to some extent in the context of this budget – they assume revenue based on the idea that the alternative minimum tax is never changed. The formula for it's never changed. They won't go into detail about that, but the implicit assumption there is that you'd have very large tax increases on middle-income families that almost no one thinks will actually take place.
BROOKE GLADSTONE:
But you do find experts challenging the president's projections in most stories.
DEAN BAKER:
You can find them. You have to look. And it's not in most stories. It's in some stories. And even there, the question is, is it put in a framework that, I think, people could understand? Now, some of that, you could lay the blame on the experts, that, you know, they could try to put this in wording that people would understand.

But I think that reporters are inclined to treat anything that comes from the administration as sort of being, at least on a prima facie basis, credible. It doesn't mean that they never challenge it. But until there's, you know, some sort of serious effort, usually by the leadership of the other party, to question it, you know, it's basically accepted pretty much at face value.

BROOKE GLADSTONE:
Now, your criticisms are pretty much coming from the left, it's fair to say. Do you feel that this is just bowing to power – or laziness? Or what's the problem?
DEAN BAKER:
I'd say that the two go together; that it's the easiest to do, you know, get the number on the page and write it down. So it's a bit of laziness, and it a bit of bowing to power; that, you know, if you do something, you know, you're calling the White House to account on their budget numbers, it's stepping on a line that can get you in trouble.

Now, sometimes they do that. But the easiest thing to do is just do what was done last year. Do what everyone else is doing.
BROOKE GLADSTONE:
So front and center, in all of the budget reporting this week has been the issue of the federal deficit. Do you think people are getting an accurate picture of that aspect of the story?
DEAN BAKER:
I think people actually are not very clear at all on the federal deficit. I think people are caught up in a debate that, you know, really is much more theatrics than substance. And, again, they don't have the means to assess that. So they could hear, on the one hand, President Bush saying, you know, I just put out a budget proposal that has my tax cuts continuing in 2012, and it still has a surplus that year. And we can have the Democrats correctly say, that's not true, because if we look at, you know, some of your numbers more closely, we won't have a surplus.

But then the underlying question is, okay, how big a deal is that deficit in 2012? Well, it's actually probably not that big a deal.
BROOKE GLADSTONE:
Dean, you have really rocked my world right now, because everyone I know says that the deficit is a huge problem. It's being financed by China; if China stops financing it, the entire country will collapse. And you're telling me it's not that big of a deal?
DEAN BAKER:
Well, actually, what's interesting about what's being financed by China, China is financing our trade deficit. Our trade deficit last year was over 800 billion dollars compared to our budget deficit, which was about 270 billion. Now, the big deal in that story, in fact, is the trade deficit – almost three times the size of the budget deficit, which gets very little attention, usually devoted to page three of the business section.
BROOKE GLADSTONE:
So if you want to get hysterical about a deficit, look at the trade deficit, not the budget deficit.
DEAN BAKER:
Well, again, it's simple numbers – three times the size.
BROOKE GLADSTONE:
Dean Baker is co-director of the Center for Economic and Policy Research. He blogs about economic reporting on The American Prospect’s website. It was a pleasure talking to you.

DEAN BAKER:
Well, thanks a lot.