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Deficit Number Slip Up at the Associated Press
July 11, 2006
Rebecca Goldin Ph.D
A problem with subtraction creates better than expected economic news.

The Associated Press should possibly try not to get the news out so fast when it comes to deficit reporting. While the White House recently released ammended figures for the budget year ending September 30, 2006, and announced that it was revising its figure down by 127 billion dollars, the Associated Press initially titled its piece about the news, “Budget deficit drops $296B under estimate.”

How did the AP arrive at a 296 billion drop? A simple editorial error: the budget deficit was estimated at 423 billion dollars in February, and revised downwards to a current estimate of 296 billion. The headline-writer must have skimmed the news a little too quickly, reporting the current estimate as if it were the amount the estimate dropped. The difference is 127 billion. It’s worth noticing that at the time the White House released its estimate, the Congressional Budget Office also realeased an estimate – of 368 billion dollars in deficit. The current White House estimate is 72 billion dollars down from the original CBO estimate.

By leaving out the little word “to” after “drops” in the headline, the Associated Press rather radically revised the White House figures. Even worse, the headline suggests that the news is about the deficit dropping, rather than the estimated dropping.

By lunchtime, the AP had discovered its mistake and replaced “drops” with “narrows to.”

For the deficit itself, the news isn’t quite as tantalizing: for 2005, it was 318 billion dollars, according to the AP. A drop to 296 billion dollars is just under a seven percent reduction in the deficit. Not quite as praiseworthy as the AP touted.